Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA)
What it is:
The Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) was signed into law on May 17, 2006.
How it works (Example):
TIPRA was passed to achieve five primary goals:
- Prevent a scheduled increase in the number of people subject to the alternative minimum tax (AMT)
- Preserve lower capital gains and dividends tax rates in effect through 2010
- Preserve higher limits for expensing the purchase of certain assets
- Remove an income ceiling on certain IRA conversions
- Apply the so-called "kiddie tax" to more taxpayers under age 18
Why it Matters:
In general, TIPRA was a mishmash of tax changes, most of which benefited most taxpayers.