Ms.Jorland is a 30-year old single taxpayer.Her $3,760 AGI is the total of $7,940 interest and dividend income from a trust fund,$4,190 income from a rent property,and an $8,370 loss from a new business that she started this year.Compute Ms.Jorland's maximum IRA contribution.

Question

Quizplus · Accepted Answer

Ms. Jorland's AGI includes both interest and dividend income as well as rental income, both of which are considered passive income sources. However, her loss from the new business is considered an active income source. This means that she is not eligible to make a tax-deductible contribution to a traditional IRA as her AGI exceeds the phase-out limit for single filers in 2021, which is $76,000. Therefore, her maximum IRA contribution is $0.

MsJorland Is a 30-Year Old Single Taxpayer