Susan L. Rosetti - Page 2

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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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