Hello - I'm retired and recently sold ESPP shares in a qualifying disposition. The bargain element is income (1040 line 7). Turbotax says I can put that into an IRA.

[mikerk]

However, that income is not "earned" per se.  Does the IRS allow that bargain element income to be put into an IRA? (I'm looking to put it into a Roth IRA, not looking for a deduction.)

[MinhT · Accepted solution]

The discount element in an ESPP disposition is reported on line 7 of form 1040 as Wages.

This is considered earned income. You "earned" the discount by working at the company which granted you the ESSP shares. And this income qualifies you for a contribution to a Traditional IRA (if you are younger than 70 1/2) or a Roth IRA.

[mikerk]

Wow.  That's good news!  Thank you.

[MinhT]

Hope this was helpful!