Mark J. Fuhrman & Mary A. Fuhrman - Page 3

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          conservatorship proceedings in the Nebraska county courts; and              
          fees assessed in prosecution actions related to city ordinances             
          regulating non-moving traffic violations.                                   
               On their 1992 Federal income tax return (the 1992 return),             
          petitioners reported gross income of $73,505.46 and adjusted                
          gross income of $71,161.85.  The income so reported consists                
          primarily of petitioner's salary as a Nebraska district court               
          judge.  Mary Fuhrman was unemployed and received no compensation            
          during 1992.  On the Form W-2 provided to petitioner by the State           
          of Nebraska and attached to the 1992 return, there is an "X" in             
          the box for pension plan.  During 1992, petitioner contributed              
          $2,250 to individual retirement accounts (IRA's) described in               
          section 408.  On the 1992 return, petitioners claimed a deduction           
          of $2,250 for the contributions to the IRA's.                               
               In the notice of deficiency, respondent disallowed the IRA             
          deduction and provided the following explanation:                           
                    We didn't allow your deduction for IRA                            
                    contributions because you were covered by a                       
                    retirement plan at work * * *, and your                           
                    "modified adjusted gross income" is more that                     
                    $50,000 * * *.                                                    
               As a general rule, a taxpayer is entitled to deduct amounts            
          contributed to an IRA.  Sec. 219(a); sec. 1.219-1(a), Income Tax            
          Regs.  For a married individual filing a joint return, the                  
          deduction in any taxable year may not exceed the lesser of $2,250           
          or an amount equal to the compensation includable in the                    

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