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McNeary and was not eligible to participate in a qualified
retirement plan with any of his subsequent employers, he should
be entitled to the IRA deduction because he was not an active
participant in a retirement plan for “the vast majority of the
tax year 1997” and at the time he filed his return. Respondent
contends that during 1997 petitioner was an active participant in
an employee retirement plan regardless of the length of time he
participated in the plan. Because petitioner was an active
participant and his adjusted gross income exceeded the applicable
limit, respondent’s position is that petitioner was not eligible
to deduct contributions to an IRA in 1997 under section 219(g).
In general under section 219(a) an individual is entitled to
deduct the amount contributed to an IRA. The amount of the
deduction is limited to the lesser of $2,000 or an amount equal
to the compensation includable in a taxpayer’s gross income for
the year. Sec. 219(b)(1). In addition, the amount of the
deduction may be limited if the taxpayer was an active
participant for any part of the taxable year. Sec. 219(g)(1).
An “active participant” is an individual who is an active
participant in a section 401 or other employer retirement plan.
Sec. 219(g)(5). This limitation results in total disallowance of
the deduction for a single taxpayer when the total adjusted gross
income exceeds $35,000. Sec. 219(g)(2) and (3). As relevant
herein, adjusted gross income is determined without regard to any
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Last modified: May 25, 2011