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includable in the taxpayer’s gross income for such taxable year.
See sec. 219(b)(1). In addition, the amount of the deduction is
limited where the taxpayer was, for any part of the taxable year,
an "active participant" in a retirement plan qualified under
section 401(a)2 or a plan established for its employees by the
United States, by a State or political subdivision thereof, or by
any agency or instrumentality of any of the foregoing. Sec.
219(g)(1), (5)(A)(i), (iii). No deduction is allowed for an
active participant who is married filing a separate return and
whose adjusted gross income exceeds $10,000. See sec.
219(g)(3)(iii).
Petitioner contends that she is entitled to a $2,000 IRA
deduction. We disagree. Petitioner made a contribution to a
Keogh plan rather than an IRA. Although taxpayers with “earned
income” from self-employment are eligible to deduct contributions
made to a qualified Keogh plan,3 petitioner, in 1998, received
wages from the Department of Transportation and interest income
but did not receive any earned income from self-employment. See
secs. 401(c)(1) and (2)(A), 404(a)(8)(C), and 1402(a), (c).
Accordingly, petitioner’s contributions to the Keogh plan are not
2 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
3 Keogh plans are retirement plans for self-employed
individuals.
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Last modified: May 25, 2011