Her maximum permissible IRA contribution is $5,670 because "net earnings from self-employment" is defined as net profit minus the deductible portion of self-employment taxes. It is defined this way because one-half of the self-employment tax is equivalent to the employer-paid portion of self-employment taxes which reduces the employer's profit.
In your daughter's case, self-employment tax is $862, so net earnings are $6,101 - $431 = $5,670, making $5,670 her maximum permissible IRA contribution.
