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contribution for that year may be further limited.4 See sec.
219(a), (g)(1), and (5)(A)(i).
An “active participant” is defined by section 219(g)(5) as
an individual:
(A) who is an active participant in--
(i) a plan described in section 401(a) which
includes a trust exempt from tax under section 501(a),
(ii) an annuity plan described in section 403(a),
(iii) a plan established for its employees by the
United States, by a State or political subdivision
thereof,or by an agency or instrumentality of any of the
foregoing,
(iv) an annuity contract described in section
403(b), or
(v) a simplified employee pension (within the
meaning of section 408(k)), or
* * * * * * *
(B) who makes deductible contributions to a trust
described in section 501(c)(18).
4 The IRA deduction phases out for taxpayers whose modified
adjusted gross incomes exceed certain thresholds (with a complete
disallowance after $64,000 in 2002). See sec. 219(g)(2), and
(3)(B)(i). Here, petitioners’ modified adjusted gross income
exceeded the threshold amount, and thus Mrs. Colombell’s
deduction would be completely disallowed if she were an active
participant in a qualified retirement plan. For individuals
subject to the limits of sec. 219(g) solely because their spouse
was an active participant in a qualified plan, the phaseout does
not apply until the couple’s joint modified adjusted gross income
exceeds $150,000. See sec. 219(g)(7)(A). Mr. Colombell was not
himself an active participant in a qualified retirement plan, and
the petitioners’ modified adjusted gross income did not exceed
$150,000 in 2002. Thus, the half of the claimed deduction
attributable to Mr. Colombell is not at issue in this case.
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