Ronald A. and Kellie Weigelt - Page 4

                                        - 4 -                                         
          being examined, petitioners filed an amended 1992 return omitting           
          the SSB payment from income.  The amended return was treated as a           
          claim for refund and was denied by respondent.  Petitioners do              
          not dispute the adjustments to the wage and interest income.                
          They do, however, contest the disallowance of the IRA                       
          contributions deduction and contend that the SSB payment is                 
          nontaxable, and, accordingly, they are entitled to an                       
          overpayment.  The parties agree that, if the SSB payment is                 
          nontaxable, petitioners' adjusted gross income is $46,277.2                 
               The issues raised both depend on the taxability of the SSB             
          payment.  With regard to the IRA issue, under section 219(a) an             
          individual is allowed a deduction for qualified retirement                  
          contributions.  Section 219(g)(1), however, limits the deduction            
          where an individual or the individual's spouse is an "active                
          participant" for any part of the taxable year of certain pension            
          plans.  An active participant includes a participant in "a plan             
          established for its employees by the United States".  Sec.                  
          219(g)(5)(A)(iii).  Petitioner was an "active participant" during           
          1992.  In the case of married individuals filing a joint return,            
          the deduction when one individual is an "active participant" is             
          reduced using a ratio determined by dividing the amount of the              
          taxpayers' adjusted gross income in excess of $40,000 by $10,000.           

          2   Adjusted gross income as reported ($112,111) plus                       
          adjustments to income ($236) plus disallowed IRA contributions              
          deduction ($4,000) minus the SSB payment ($70,070).                         

Page:  Previous  1  2  3  4  5  6  7  8  9  Next

Last modified: May 25, 2011