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The sole issue for decision is whether petitioners are
entitled to a deduction of $5,221 for the year 2001 for a
contribution to a retirement plan under section 408(k), commonly
referred to as a SIMPLE IRA.
Some of the facts were stipulated. Those facts and the
accompanying exhibits are so found and are incorporated herein by
reference. Petitioners’ legal residence at the time the petition
was filed was Labadie, Missouri. Petitioners were not present at
trial but were represented by counsel.
Petitioners filed a timely joint Federal income tax return
for 2001, on which they reported the following income:
Wages and salaries $299,273
Taxable interest 12,537
Ordinary dividends 1,370
Taxable refunds and credits 235
Schedule C, Trade or Business Income 10,384
Schedule D, Capital Losses (3,000)
Total income $320,799
On line 29, Self-employed SEP, SIMPLE, and qualified plans,
of Form 1040, U.S. Individual Income Tax Return, for the year
2001, petitioners claimed a deduction of $6,788. In the notice
of deficiency, respondent determined that $1,567 of that amount
was allowable as a SEP contribution, and $5,221 was disallowed.
Thus, of the $6,788 claimed on line 29 of their return, $5,221
was not allowed as a qualified plan deduction. The issue,
therefore, is whether that $5,221 is allowable as a pension plan
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Last modified: May 25, 2011