What is the maximum amount that karen may deduct

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Reference no: EM132202063

Question -

Q1. Rollovers Telly, age 38, has a $140,000 IRA with Blue Mutual Fund. He has read good things about the management of Green Mutual Fund, so he opens a Green Fund IRA. Telly asked for and received his balance from the Blue Fund on May 1, 2017.

a. What is the total amount Telly will receive from the Blue Fund IRA?

b. What amount must Telly contribute to the Green Fund IRA to avoid having taxable income and penalties for early withdrawal?

c. When is the last day Telly can roll over the amount received into the Green Fund IRA and avoid taxation in the current year, assuming no unusual circumstances? (May 30, 2017; June 30, 2017; OR August 2017)

d. What amount will Telly initially receive if the distribution were from his employer's qualified retirement plan?

Q2. Karen, 28 years old and a single taxpayer, has a salary of $30,000 and rental income of $33,000 for the 2017 calendar tax year. Karen is covered by a pension through her employer.

a. What is the maximum amount that Karen may deduct for contributions to her traditional IRA for 2017?

b. If Karen is a calendar year taxpayer and files her tax return on August 15, what is the last date on which she can make her contribution to the IRA and deduct it for 2017?

Reference no: EM132202063

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