The TIPRA Bonanza

Passed by Congress in May 2006, the Tax Increase Prevention and Reconciliation Act of 2005 will allow taxpayers who are in the lowest federal income-tax brackets to pay no capital-gains taxes on long-term investment assets sold from 2008 to 2010. Taxpayers in the 15%, federal income-tax bracket or below will enjoy a 0%, capital-gains tax rate beginning Jan 1, 2008. With proper planning, your clients may have an opportunity to harvest gains on their investments without incurring a capital-gains tax. This new tax bracket for capital gains is scheduled to run from 2008 to 2010. The opportunity to harvest gains without the tax may be limited, so educate your clients now about the potential benefits of this technique.