IRA contributions in year Taxpayer dies

[nhawver]

I have a client who was born 7/22/42 died 12/12/12. Made a $600 Traditional IRA contribution before he passed. The software I am using is not allowing the IRA deduction when I add the Date of Death.
I have reviewed Pub 590 and I can not find any language that supports that this is a deduction that is not allowed.
Does anyone have supporting info on this.
The client would not ahve turned 701/2 until Jan 2013 so it is not the 70 1/2 rule that is disallowing this deduction.

[Matt Sova]

UltraTax

I entered the data in my system as a test subject. $25,000 in wages $600 IRA contribution and 7/22/42 and 12/12/12 as dates of birth and death. $600 IRA contribution is allowed. Could be a software issue?

[ChEAr$]

Must be a software issue as Matt says. He was alive when he made the contribution. It was legal then, and does not become illegal just because he's dead. By "illegal" I mean it's not permitted by IRS as a tax matter.

The only time it can't be done in year of death, is after death. Once had a client who actually did make the contribution to her deceased husband's IRA, and the bank accepted it.

[Roland Slugg]

Did he have earned income of at least $600 in 2012? Many 70-yo people don't.

[FEDUKE404]

Things to check

1 - If you remove the DOD entry, does your software then allow the IRA deduction?

2 - As Roland Slugg asked, did your client have sufficient earned income to allow any Traditional IRA deduction?

FE

[JohnH]

What software are you using?
Seems like the diagnostic should tell you why it isn't allowing the adjustment.