Can I treat ESPP stock sale 'compensation income' as as 'earned income' for use for a Roth IRA contribution even if I have no other earned income? I'm currently retired.

pandersj5805 · ‎June 5, 2019

I am retired and have no 'earned income' but a sale of ESPP stock last year generated 'compensation income' which is taxed as 'ordinary income'. Does this income qualify as ROTH IRA contribution source?

dmertz · ‎June 5, 2019

See What Is Compensation? in IRS Pub 590-A:

https://www.irs.gov/publications/p590a/ch01.html#en_US_2016_publink1000230355

The IRS considers your eligible compensation to be the amount in box 1 of your W-2 minus any amount of deferred compensation in box 11.

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Can I treat ESPP stock sale 'compensation income' as as 'earned income' for use for a Roth IRA contribution even if I have no other earned income? I'm currently retired.

Retirement tax questions