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year. A qualified retirement contribution is (1) “any amount
paid in cash for the taxable year by or on behalf of an
individual to an individual retirement plan for such individual’s
benefit”, sec. 219(e)(1), and (2) “any amount contributed on
behalf of any individual to a plan described in section
501(c)(18)”, sec. 219(e)(2).
Section 501(c)(18) describes trusts that are exempt from
taxation. A trust may qualify under section 501(c)(18) if: (1)
It was created before June 25, 1959, as part of a plan providing
for the payment of benefits under a pension plan funded only by
contributions of employees; (2) it is impossible at any time
before all liabilities are satisfied with respect to employees
under the plan for any part of the corpus or income to be (within
the taxable year or thereafter) used for any purpose other than
the providing of benefits under the plan; and (3) benefits are
payable to employees under a classification provided in the plan
which does not discriminate in favor of employees who are highly
compensated (within the meaning of section 414(q)).
On her Form 1040, petitioner deducted the $1,916 payment as
a qualified retirement contribution to an individual retirement
account (IRA). She contended in her pretrial memorandum and at
trial that she properly deducted that amount as an IRA
contribution. In the opening brief, respondent argued that
section 219(g)(5) limits IRA deductions for active participants
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Last modified: May 25, 2011