President Bush signed into law a one-year patch for the alternative minimum tax, in addition to a $555-billion omnibus spending bill to fund government operations through 2008.

The House approved the AMT patch last week after the Senate passed a version that left out the offsets that Congressional Democrats had tried to include to compensate for the loss in revenue. But those offsets met with opposition from Congressional Republicans and some Democrats as well. Some of the pay-as-you-go offsets would have raised taxes on the carried interest earned by managers of hedge funds and private equity firms, as well as cut down on the use of offshore tax havens to defer tax payments by hedge fund managers.

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