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total contributions consists of $40,729 in contributions for the
plan year ending October 31, 1992, and a $50,365 contribution for
the plan year ending October 31, 1993. Petitioner concedes, if
we should hold that she had earned income in 1992 in respect of
which she could make a deductible contribution to the TJM Pension
Plan, that the contribution deduction would be limited to a
lesser amount as calculated under section 1.404(a)-14(c), Income
Tax Regs.
The TJM Pension Plan was not in effect for the 1991 tax year
because petitioner did not have a written plan and trust in
existence in 1991. The TJM Pension Plan continues to remain in
effect, although petitioner has not made any subsequent
contributions to the trust under the plan.
A self-employed taxpayer may be entitled to deduct from
income her contributions to a qualified plan, provided that the
deduction does not exceed the earned income derived from the
taxpayer’s trade or business with respect to which the plan is
established. See secs. 401(c), 404(a)(1), and (a)(8). “Earned
income” is defined in section 401(c)(2)(A), which states in
relevant part: “The term ‘earned income’ means the net earnings
from self-employment (as defined in section 1402(a)), but such
net earnings shall be determined * * * only with respect to a
trade or business in which personal services of the taxpayer are
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