Individual Investment Account Act of 2005 - Amends the Internal Revenue Code to allow an individual taxpayer a tax deduction from gross income (whether or not the taxpayer itemizes deductions) for cash contributions to an individual investment account. Permits tax free distributions up to $15,000 from such accounts for the purchase of a principal residence by a first-time homebuyer. Allows an annual inflation adjustment to the $15,000 limit beginning in 2006.
Excludes individual investment accounts from the calculation of the gross estate for estate tax purposes.
Excludes from gross income gain from the sale of a principal residence if such gain is reinvested in an individual investment account.