Mary Holland Trull - Page 5




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          deduction may be limited if the taxpayer was, for any part of the           
          taxable year, an active participant.  Sec. 219(g)(1).  An “active           
          participant” is an individual who is an active participant in a             
          section 401 or other employer pension plan.  Sec. 219(g)(5).                
          This limitation results in total disallowance of the deduction              
          for a taxpayer filing as head of household 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 IRA deduction.  Sec. 219(g)(3)(A).                            
               An individual is an active participant in a defined benefit            
          plan if for any portion of the plan year she is not excluded                
          under the eligibility provisions of the plan.  Sec. 1.219-2(b),             
          Income Tax Regs.  The determination of whether an individual is             
          an active participant shall be made without regard to whether or            
          not such an individual’s rights under a plan are nonforfeitable.            
          Sec. 219(g)(5); Hildebrand v. Commissioner, 683 F.2d 57, 58 (3d             
          Cir. 1982), affg. T.C. Memo. 1980-532; Eanes v. Commissioner, 85            
          T.C. 168, 170 (1985).  If an employee makes “a voluntary or                 
          mandatory contribution to * * * [an employer pension plan] such             
          employee is an active participant in the plan for the taxable               
          year in which such contribution is made.”   Sec. 1.219-2(e),                
          Income Tax Regs.                                                            
               CP&L’s pension plan was a Stock Purchase-Savings Pension               
          (401(k)) Plan which allowed contributions by the employee and               






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