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Abstract
The most significant provisions contained in the Jobs and Growth Tax Relief Reconciliation Act of 2003 include: 1. capital gains reduction, 2. dividends received deduction, 3. an increase and extension of bonus depreciation, and 4. an increase in expensing for small business. The 2003 Act reduces the 10% and 20% rates on the adjusted net capital gain to 5% and 15%, respectively. The rate becomes 0% for taxable years beginning after December 31, 2007. Under the 2003 Act, dividends received by an individual shareholder from domestic corporations are taxed at the same tax rates that apply to Net Capital Gain increased by "Qualified Dividend Income." The 2003 Act enacts new Section 168(k)(4), which provides an additional first-year depreciation deduction that is equal to 50% of the adjusted basis of "50% Bonus Depreciation Property." Section 179 of the Code is amended so that the aggregate cost of "Section 179 Property" that may be expensed any taxable year cannot exceed $25,000, but $100,000 in the case of taxable years beginning after 2002 and before 2006.