DocketNumber: Docket No. 6840-81.
Citation Numbers: 43 T.C.M. 1320, 1982 Tax Ct. Memo LEXIS 496, 1982 T.C. Memo. 252
Filed Date: 5/5/1982
Status: Non-Precedential
Modified Date: 11/21/2020
MEMORANDUM FINDINGS OF FACT AND OPINION
DRENNEN,
OPINION OF THE SPECIAL TRIAL JUDGE
GALLOWAY,
FINDINGS OF FACT
Petitioners resided at Cranbury, New Jersey, at the time they filed their petition. On their joint tax return filed for the taxable year, they claimed a deduction of $ 1,500 for a contribution made to an IRA.
During the early part of 1978, petitioner was employed by A. G. Becker, Inc. (Becker). 4 Becker maintained a qualified pension plan in which petitioner was an active participant. Petitioner severed his employment relationship with Becker in April 1978 and received no distribution of funds upon termination of his employment. Becker's pension plan, designated as The Becker Warburg Paribas Group Incorporated Pension Plan and Trust Agreement (Amendment No 12 Effective as of October 30, 1976), states*499 in part, as follows:
(b) In the case of any employee who shall have terminated his Period of Continuous Employment and who shall return to work with a Company or Related Company, two or more separate Periods of Continuous Employment of such employee ending after October 29, 1976 (but not any such Period ending before October 30, 1976) shall be aggregated as follows:
(i) If he returns to work within one (1) year after such termination, his Period of Continuous Employment shall be deemed not to have terminated for purposes of determining whether he shall have completed a Period of Continuous Employment of at least one hundred twenty (120) months (but not for purposes of determinig his Credited Service), and he shall be given credit for the*500 period between the date of such termination and the date of such reemployment.
(iii) If he was not a Retired Participant and returns to work more than one (1) year after such termination, such prior Period shall be aggregated with all subsequent Periods of Continuous Employment for all purposes hereunder only if the number of months which have elapsed between such termination and the date of such reemployment are less than the number of months in such prior Period of Continuous Employment.
Later in 1978, petitioner was employed by Interactive Data Corporation, which did not provide pension plan coverage for employees. Petitioner deposited $ 1,500 into an IRA account in December 1978.
OPINION
Section 219, as applicable to the year 1978, allows a deduction for a contribution to an IRA described in section 408(a) up to $ 1,500 in the taxable year. However, section 219(b)(2) denies the deduction in the event the individual was an active participant in a plan described under section 401(a) for
Respondent maintains that since petitioner was an active participant in the Becker pension plan during some part of 1978, he may not claim a $ 1,500 deduction*501 for the IRA contribution. We agree. This case is virtually indistinguishable from numerous other cases decided by this Court. See
Petitioner, however, argues that this case should be controlled by the decision of
In the
After reciting the factual differences in
1. All section references are to the Internal Revenue Code of 1954, as amended, unless otherwise indicated. ↩
2. Pursuant to the order of assignment, on the authority of the "otherwise provided" language of
3. Other issues contained in respondent's notice of deficiency, i.e., disallowance of deductions for taxes claimed and for employee business expenses claimed and increasing interest income have been conceded by petitioners.↩
4. The record does not disclose when petitioners commenced working for Becker.↩