- 55 -
by or on behalf of individuals during the taxable year to, inter
alia, an IRA. Sec. 219(a), (e); sec. 1.219-1(a), Income Tax
Regs. Such a deduction is limited to the lesser of $2,000 or the
amount of compensation includible in such individual’s gross
income for such taxable year. Sec. 219(b)(1). As pertinent
here, under section 219(c) as in effect for petitioners’ taxable
year 1996, in the case of married couples filing jointly where
one spouse receives compensation and the other spouse (non-
receiving spouse) does not, the amount allowable as a deduction
for contributions to the nonreceiving spouse’s IRA shall not
exceed $250.49
We have found that petitioners failed to show that Ms.
Whitehead performed any services for Burien Nissan during 1996
for which Burien Nissan intended to, or did in fact, compensate
49As pertinent here, under sec. 219(c) as in effect for
petitioners’ taxable year 1997, in the case of married couples
filing jointly where one spouse (lesser-receiving spouse) re-
ceives less compensation than the other spouse, the amount
allowable as a deduction for contributions to the lesser-receiv-
ing spouse’s IRA shall not exceed $2,000. See Small Business Job
Protection Act of 1996, Pub. L. 104-188, sec. 1427(a), 110 Stat.
1802. Under sec. 219(c) as in effect for petitioners’ taxable
year 1997, petitioners are entitled to deduct the $2,000 contrib-
uted to Ms. Whitehead’s IRA regardless of whether she received
any compensation during that year. We believe that the provi-
sions of sec. 219(c) as in effect for each of petitioners’
taxable years 1996 and 1997 prompted petitioners to attribute to
Ms. Whitehead the claimed $6,600 of self-employment income that
they reported in their 1996 joint return and, inconsistently, to
attribute to Mr. Whitehead the claimed $6,600 of self-employment
income that they reported in their 1997 joint return. See supra
note 37.
Page: Previous 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 NextLast modified: May 25, 2011