Wednesday, May 10, 2006
The United States Congress is in the final stages of its work on tax reconciliation legislation. Below are some of the highlights of the current version of the bill as reported in Jeanne Sahadi, Tax bill agreement reached, CNNMoney.com, May 9, 2006:
- IRA Conversion. The bill would allow traditional IRAs to be converted to Roth IRAs even if the taxpayer's adjusted gross income is over $100,000. This provision may actually raise revenue because IRA holders would be required to pay tax now, that is, at the time of the conversion.
- Long-term capital gains and dividends tax rate to remain at 15% for two more years (that is, through 2010).
- Enhanced relief from the alternate minimum tax.