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Mr. and Mrs. Davos file a joint tax return. Each spouse contributed $3,800 to a traditional...

Mr. and Mrs. Davos file a joint tax return. Each spouse contributed $3,800 to a traditional IRA. In each of the following cases, compute the total deduction for these contributions. The AGI in each case is before any deduction.

a.) Neither spouse is an active participant in a qualified retirement plan, and their AGI is $123,400.

b.) Mr. Davos is an active participant, but Mrs. Davos is not. Their AGI is $123,400.

c.) Both spouses are active participants, and their AGI is $89,200.

d.) Mr. Davos is self-employed and doesn’t have a Keogh plan. Mrs. Davos is an active participant. Their AGI is $109,400. (Do not round intermediate calculations.)

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Answer #1

A) the couple's $7600 ($3800+$3800) contribution is fully deductible because the spouse is an active participant in qualified plan.

B) Mr. Davos $3800 is deducrible but mrs. Davos is not because Mr. Davos is an active participant and his AGI is more than $110000

C) the couple's $7600 is fully deductible because their AGI is less than $90000

D) mr. Davis $3800 is fully deductible. The deduction of Mrs. Davos contribution is limited to $114 ($3800 - $3686 reduction)

Reduction = $3800 contribution × (109400-90000)/20

= $3686

For any query please comment and

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