Chee is a key employee of an H.R 10 (Keogh)defined contribution plan (a profit sharing plan)created by a partnership.Answer each of the following independent questions.
a.During 2014,$7,400 is contributed to the H.R.10 plan for Chee.What amount is deductible if Chee's earned income is $45,000 (after the deduction for onehalf of self-employment tax)?
b.In 2014,$8,020 is contributed to the H.R.10 (Keogh)plan on Chee's behalf.If Chee's earned income is $36,000 (after the deduction for one-half of self-employment tax),what deduction,if any is allowed?
c.The partnership had a bad year in 2014,and only $820 was contributed to the H.R.10 plan on Chee's behalf.Chee earned only $700 during 2014.Calculate Chee's allowable deduction.

Question

Chee is a key employee of an H.R 10 (Keogh)defined contribution plan (a profit sharing plan)created by a partnership.Answer each of the following independent questions.
a.During 2014,$7,400 is contributed to the H.R.10 plan for Chee.What amount is deductible if Chee's earned income is $45,000 (after the deduction for one­half of self-employment tax)?
b.In 2014,$8,020 is contributed to the H.R.10 (Keogh)plan on Chee's behalf.If Chee's earned income is $36,000 (after the deduction for one-half of self-employment tax),what deduction,if any is allowed?
c.The partnership had a bad year in 2014,and only $820 was contributed to the H.R.10 plan on Chee's behalf.Chee earned only $700 during 2014.Calculate Chee's allowable deduction.

Quizplus · Accepted Answer

f.Lesser of $52,000 or 20% × $36,000.Therefore,$7,200 can be taken as a deduction for AGI.
g.Lesser of $52,000 or 20% × $700.Therefore,$140 can be deductible.

Chee Is a Key Employee of an H