capital gains tax revision

Cutting Your Capital-Gains Tax Bill to Zero
Affluent People Maneuver
To Exploit New Break Meant


A tax break that could benefit many investors is scheduled to arrive next January, and it's not too soon to start planning ahead.

At first glance, the provision appears relevant only to lower-income taxpayers: Beginning in 2008, the tax rate on long-term capital gains from sales of stocks, mutual funds and other securities is scheduled to drop to zero -- yes, zero -- for people in the two lowest ordinary income brackets. (For higher-income taxpayers, the top long-term capital-gains rate is scheduled to remain at 15%.)

But financial planners say many people with higher income also may be able to take advantage of the zero tax rate if they can reduce their taxable income through deductions, such as mortgage interest and charitable donations, or by socking away money in tax-advantaged accounts, such as 401(k) plans.

"A lot of middle-income people will qualify for this," says Tony DeChellis, senior manager of product development at Thomson Corp.'s PPC/Quickfinder, a Fort Worth, Texas, publisher of tax information.

Families in an upper tax bracket may benefit, too, by making gifts of stock, mutual-fund shares and other securities that have increased in value over the years to low-income family members, such as their young-adult kids, grandchildren or parents, who may then be able to turn around and sell the securities tax free next year.

Any longer articles or other sources about this new tax break available?

H & R Block web site for 20 dollars: HR Block Tax Advisor link --

http://www.hrblock.com/taxes/product...p?productId=44