While the extension of the reduced rates on capital gains and dividends, alternative minimum tax relief, and the continuation of enhanced Section 179 expensing have received the most publicity, there are a host of other changes in the Tax Increase Prevention and Reconciliation Act of 2005.

There is a two-year extension of the reduced rates on capital gains and dividends. Prior to the legislation, c apital gains and dividend income were to be taxed at a maximum rate of 15 percent only through 2008. For taxpayers in the 10 and 15 percent tax brackets, the tax rate is 5 percent through 2007, and zero in 2008. The act extends the reduced rates effective in 2008 through 2010 and the reduced rates terminate for taxable years beginning after Dec. 31, 2010.

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