As for age, there is no age restriction on opening a IRA. For example, it is perfectly legal for a child to have earned income (e.g. a teen babysitting outside their household) and putting up to the amount of earned income in an IRA. In fact, their parents can let them spend the money, and the parents can fund the IRA.
You are correct, a minor cannot sign a contract, that is why the IRA would have to be held in a custodial account For Benefit Of (FBO) the child until the child reaches the age of majority. This is no different than if a child receives an inheritance.
I’m not trying to avoid taxes, but trying to follow the law, and use the tax law to my family’s benefit. This is no different than anyone else placing earned income in a IRA to save for retirement.
The key is the earned income. Everything I’ve read says sales from hobbies and art is considered earned income and must be reported as such.
I reasonably believe a finger painting would be worth $6,000, the maximum contribution limit for an IRA. Who is able to tell me otherwise. And no, I don’t plan to sell it in the future at a loss to offset capital gains.
