Alex is 37 years old, single and employee of Ellis Company. I. If Alex is an active participant in the company's pension plan, he is allowed to make a contribution to his IRA account only if his adjusted gross income is less than $60,000. II. If Alex is an active participant in the company's pension plan, and has adjusted gross income of $65,000, he is allowed to contribute $5,500 to his IRA account, but he is only allowed a deduction of $2,750 for the contribution because his adjusted gross income is between $60,000 - $70,000.
A) Only statement I is correct
B) Only statement II is correct
C) Both statements are correct.
D) Neither statement is correct.

Question

Quizplus · Accepted Answer

Statement II is correct because Alex can contribute to his IRA but the deduction is phased out for incomes between $60,000 and $70,000. Statement I is incorrect because Alex can still contribute, but the deduction is limited.

Alex Is 37 Years Old, Single and Employee of Ellis