Sammy,age 31,is unmarried and is not an active participant in a qualified retirement plan.His modified AGI is $55,000 in 2011.The maximum amount that Sammy can deduct for a contribution to a traditional IRA is:

Question

Quizplus · Accepted Answer

Since Sammy is unmarried and not an active participant in a qualified retirement plan, the maximum amount he can deduct for a contribution to a traditional IRA in 2011 is $5,000. This is because the maximum allowed deduction is the lesser of the contribution limit ($5,000 for 2011) or 100% of his compensation ($55,000 in this case). Therefore, the correct answer is D) $5,000.

Sammy,age 31,is Unmarried and Is Not an Active Participant in a Qualified