Question
Pier, age 30, is married and files a joint return with his spouse. On February 15, 2017, Pier establishes a traditional IRA for himself and
Pier, age 30, is married and files a joint return with his spouse. On February 15, 2017, Pier
establishes a traditional IRA for himself and a spousal IRA for his spouse with an $11,000
contribution, $5,500 for himself and $5,500 for his wife. Pier's spouse earned $2,500
in 2016 from a part-time job, and their combined AGI is $64,000. Neither Pier
nor his spouse is an active participant in an employer-sponsored retirement plan.
| a. | What amount of the contribution is deductible? |
| b. | To what year does the contribution apply? (Assume that an election is made to treat Pier's spouse as having no compensation.) |
| c. | Is the deduction reported as for AGI or from AGI? |
| d. | How would your answer to Part a change, if at all, if Pier and his spouse were active participants in an employer-sponsored retirementplan? |
| e. | If a portion of the contribution is nondeductible in Part d, is it possible for Pier to make a deductible and a nondeductible contribution in the same year? Explain. |
| f. | How would your answer to Part a change if Pier and his spouse's combined AGI were $155,000 in 2016 and Pier was an active participant in an employer-sponsored retirement plan? |
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