Kathy and Patrick Are Married with Salaries of $28,000 and $21,000,respectively.Adjusted

question 82

Short Answer

Kathy and Patrick are married with salaries of $28,000 and $21,000,respectively.Adjusted gross income on their jointly filed tax return is $54,000.Both individuals are active participants in employer provided qualified pension plans.What are Kathy and Patrick's maximum combined IRA contribution and deduction amounts?
$\begin{array}{ll}\text { Contribution } & \text { Deduction } \\a.\$-0- & \$-0- \\b.\$ 11,000 & \$-0- \\c.\$ 5,500 & \$ 5,500 \\d.\$ 11,000 & \$ 8,000 \\e.\$ 11,000 & \$ 11,000\end{array}$

---

Definitions:

Security

A financial instrument that represents an ownership position in a publicly-traded corporation (stock), a creditor relationship with governmental body or a corporation (bond), or rights to ownership as represented by an option.

Income Bonds

Bonds that pay interest only when the issuer has sufficient earnings, making them riskier than regular bonds that guarantee interest payments.

Rating

A rating refers to an evaluation or assessment of something's quality, quantity, or a combination thereof, often used in financial contexts to gauge the creditworthiness of entities.

Interest

The cost of borrowing money or the payment received for lending money, typically expressed as an annual percentage rate.