Question

What is the maximum IRA contribution that Mr. Janson can make under each of the following assumptions? He is age 20 and single. His only income item is $12,100 interest from a trust fund. He is age 40 and single. His only income item is a $34,900 share of ordinary income from a partnership. He is age 60 and single. His only income item is $21,300 wages from his job. He is age 46 and files a joint return with his wife. His sole proprietorship generates a $7,790 loss, and his wife’s salary is $46,700.

Answer 1

Answer:

He is age 20 and single. His only income item is $12,100 interest from a trust fund. NO CONTRIBUTION SINCE HE HAS NO EARNED INCOME

He is age 40 and single. His only income item is a $34,900 share of ordinary income from a partnership. MAXIMUM CONTRIBUTION OF $6,000

He is age 60 and single. His only income item is $21,300 wages from his job. MAXIMUM CONTRIBUTION OF $7,000

He is age 46 and files a joint return with his wife. His sole proprietorship generates a $7,790 loss, and his wife’s salary is $46,700. MR. JANSON CANNOT CONTRIBUTE ANY MONEY TO THE IRA ACCOUNT, BUT HIS WIFE CAN CONTRIBUTE $6,000 ON HER ACCOUNT AND $6,000 ON MR. JANSON'S ACCOUNT.

Explanation:

In 2019, the limit for RA contributions increased by $500 to:

• under age 50 ⇒ $6,000 per year
• over age 50 ⇒ $7,000 per year

only earned income can be contributed

you cannot contribute more than what you earn

Answer 2

Answer: (a) The person has no contribution to made since he has no compensation, (b )The maximum contribution is $6,000 (c) The maximum contribution is $6,000 (d ) The maximum contribution is $7,000 ( e) The person will contribute a reduced amount for if income is between $193,000 to $203,000 for couples filling jointly (f) The sole proprietorship who made a loss of $7,790 has no contribution to made but his wife contribution is $6,000

Explanation:

(A) When a person is age 20, and single the person has no contribution because the person does not have a compensation.

(B) For an individual whose only income item is $12,100 interest from a trust fund the contribution limit is $6,000

(C) For an individual who is age 40 and single whose only income is a $34,900 share of ordinary income from a partnership the maximum contribution is $6,000

(D) For an individual who is age 60 and single whose only income is $21,300 wages from his job is maximum contribution is $7,000

(E) For a person who is 46 and files a joint return with his wife, the person can contribute a reduced amount if the income is between $193,000 to $203,000 for a couple filling jointly.

(F) since the person is a sole proprietorship and generates $7,790 loss, tax is only paid from profit or income, he has no contribution to made, but his wife will contribute a maximum contribution of $6,000