Final answer:
The maximum deductible IRA contribution that John can make in 2019 is $6,000.
Step-by-step explanation:
The maximum deductible IRA contribution that John can make in 2019 depends on his income level and whether or not he participates in an employer-sponsored plan. Since John does not participate in an employer-sponsored plan, he can make the full deductible contribution to a traditional IRA if his modified adjusted gross income (MAGI) is below a certain threshold.
For 2019, if John's filing status is single and his MAGI is less than $64,000, he can contribute the maximum deductible amount of $6,000 to an IRA. However, if his MAGI is between $64,000 and $74,000, his deductible contribution limit starts to phase out. If his MAGI exceeds $74,000, he is not eligible for a deductible IRA contribution.
In John's case, his earned income is $4,500 and his unearned income (capital gain) is $31,700. Since he does not participate in an employer-sponsored plan, we only need to consider his MAGI. Since his total income is below $64,000, he can make the maximum deductible IRA contribution of $6,000.