Ross is single and maintains an IRA. During a trip to Las Vegas in 2020, he wins
Question:
Ross is single and maintains an IRA. During a trip to Las Vegas in 2020, he wins $15,000 at the roulette wheel. He decides to put half his earnings in his IRA and spend the other half on a trip to Europe. At the end of 2020, the total assets in his IRA are $29,000. Because he is covered by his employer’s pension plan, Ross does not deduct any portion of his $7,500 IRA contribution. His salary for the year is $70,000. Write a letter to Ross advising him of the tax consequences of his actions.
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Step by Step Answer:
He must pay a penalty of 90 Excess contributions to an IRA are subject to a 6 percent penalt...View the full answer
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Related Book For 
Concepts In Federal Taxation 2021
ISBN: 9780357141212
28th Edition
Authors: Kevin E. Murphy, Mark Higgins, Randy Skalberg
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