by Bob Rywick The Jobs and Growth Tax Relief Reconciliation Act of 2003 provides that the qualified dividends of non-corporate taxpayers received in a taxable year beginning after Dec. 31, 2002, will be treated as part of adjusted net capital gain. As a result, those dividends will be taxed at a maximum rate of 15 percent (5 percent if the taxpayer is otherwise in a tax bracket under 25 percent).

As originally enacted, the act also provided that dividends of fiscal year regulated investment companies and real estate investment trusts received after 2002 in a taxable year beginning in 2002 would be treated as qualified dividends. Thus, if those dividends were distributed to a non-corporate taxpayer, such as an individual, estate or trust, in a taxable year of the non-corporate taxpayer beginning in 2003, they would be taxed as qualified dividends.

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