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 $63,000.
II.If Alex is an active participant in the company's pension plan, and has adjusted gross income of $68,000, 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 $63,000 - $73,000.

Question

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 $63,000.
II.If Alex is an active participant in the company's pension plan, and has adjusted gross income of $68,000, 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 $63,000 - $73,000.
​

Quizplus · Accepted Answer

Statement I is incorrect because even if Alex is an active participant in the company's pension plan, he is allowed to make a contribution to his IRA account regardless of his adjusted gross income. However, there may be limitations on the deductibility of the contribution. Statement II is correct as it accurately describes the contribution and deduction limits for an active participant in a pension plan with an adjusted gross income between $63,000 and $73,000.

Alex Is 37 Years Old, Single and Employee of Ellis