Kevin, Single, Is an Employee of the Colonial Company and Is

question 4

Multiple Choice

Kevin, single, is an employee of the Colonial Company and is an active participant in its pension plan. Kevin's adjusted gross income for the current year is $62,000. Kevin contributes $1,000 to his conventional individual retirement account. Which of the following statements about Kevin contributions and deduction amounts is (are) true?
I.He is allowed to deduct his $1,000 contribution to his conventional IRA.
II.Kevin can also contribute but not deduct $4,500 to his Roth IRA.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Payments For Capital

Funds disbursed to acquire or maintain fixed assets, like equipment or buildings, or to compensate the providers of financial capital.

Interest

The charge for borrowing money, typically expressed as an annual percentage of the principal.

Credit

The trust which allows one party to provide resources to another party wherein the second party does not reimburse the first party immediately but promises to do so in the future.

Bonds

Fixed income investments representing a loan made by an investor to a borrower, typically corporate or governmental.