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In general
The Act * * * modifies the AGI phase-out limits
for an individual who is not an active participant in
an employer-sponsored retirement plan but whose spouse
is * * * .
* * * * * * *
Modification to active participant rule and increase
income phase-out ranges for deductible IRAs
* * * * * * *
The following examples illustrate the income
phase-out rules.
Example 1.–-W is an active participant in an
employer-sponsored retirement plan, and W’s husband, H,
is not. Further assume that the combined AGI of H and
W for the year is $200,000. Neither W nor H is
entitled to make deductible contributions to an IRA for
the year.
Example 2.–-Same as example 1, except that the
combined AGI of W and H is $125,000. H can make
deductible contributions to an IRA. However, a
deductible contribution could not be made for W.
* * * * * * *
Effective Date
The provisions are effective for taxable years
beginning after December 31, 1997.
Although the result that we reach in this case may seem
harsh to petitioners, we cannot ignore the plain language of the
statute and, in effect, rewrite the statute to achieve what may
seem to petitioners to be a more equitable result. See
Hildebrand v. Commissioner, 683 F.2d 57, 59 (3d Cir. 1982), affg.
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Last modified: May 25, 2011