Problem 1: Mr. Knox wants to make contributions to an IRA (spousal IRA) for his wife. For Mr. Knox to be eligible to make such contributions, which of the following requirements must be met?
I. They must file a joint return for the tax year.
II. He must have compensation that must be included in his income for the tax year.
III. She must have earned income.
A. I only
B. II only
C. III only
D. I and II only
E. I, II, and III
Problem 2: Gerald, age 50, withdrew $10,000 from his IRA to pay for the graduate school expenses of his son. His son's educational expenses were $10,000 and he received a $2,000 scholarship from the university to help reduce these expenses. What amount of the withdrawal from the IRA is subject to the 10% early withdrawal penalty?
A. $1,000
B. $8,000
C. $2,000
D. $0