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FINDINGS OF FACT
On her timely filed 1998 Federal income tax return,
petitioner reported $43,209 in wages, claimed a $2,000 IRA
deduction, and elected married filing separately status. On June
22, 2001, respondent disallowed the deduction and determined a
$574 deficiency.
During 1998, petitioner was a real estate agent and an
employee of the State of Florida, Department of Transportation.
She had a defined benefit plan sponsored by the Florida
Retirement System (FRS plan),1 which required employers to pay
all funding costs and provided that employees’ benefits vest in
10 years.
In 1998, petitioner made a $2,000 contribution to a Keogh
plan that was established prior to her employment with the State
of Florida.
Petitioner resided in Tampa, Florida, at the time the
petition was filed.
OPINION
Generally, a taxpayer is entitled to deduct the amount
contributed to an IRA. Sec. 219(a); sec. 1.219-1(a), Income Tax
Regs. The deduction in any taxable year, however, may not exceed
the lesser of $2,000 or an amount equal to the compensation
1 Under the FRS plan, participation, as of the date of
employment, is compulsory for those employed on or after December
1, 1970. Fla. Stat. Ann., sec. 121.051(1)(a) (West 2002).
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Last modified: May 25, 2011