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Financial Planning / Tax Strategies


Subject:  Re: Contribution to Roth IRA Date:  9/30/1999  12:33 AM
Author:  JAFO31 Number:  19250 of 129570

danhornung: "This questions is for my dad, a Foolish investor, but he knows little or nothing about the Fool. I am a big time Fool, and here is the question:

My dad will have no income next year being very retired and happy about it. He's 55 and he still wants to contribute to his Roth, but he knows that only earned income can be invested. If his wife is working, can he place $2000 of her money into his Roth?"

I am no expert, and I am sure that the other posters will be around, but I beleive that the answer is yes, assuming that your mother earned more than $2000. Is your mother also placing money in her Roth? If yes, he earned income must exceed the total placed in both Roths (which is capped at $2000 each for your mother and your father).

"Can this earned income that must be placed into the Roth be any type of income including investment income as long as it has already been taxed?"

No, it can not be any kind of income, it must be earned income. I do not have the complete definition handy, but wages and salary are earned income, investment income is not earned income, IIRC.

Regards, JAFO
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