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howahlah
Returning Member

Does short term capital gain count toward Roth IRA income limits?

I held some stocks for less than a year and sold them for a profit. I understand that the profit counts as short-term capital gain because I held them for less than a year. Does it count towards Roth IRA income limits?

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3 Replies
JoeD_CPA_CFP
Employee Tax & Finance Expert

Does short term capital gain count toward Roth IRA income limits?

Hello,

 

Thanks for the question. Yes, all forms of non-exempt personal income count for the calculation of modified adjusted gross income for the ROTH IRA contribution limit. Here is a link to the IRS for more information.

Amount of Roth IRA Contributions That You Can Make for 2022

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Does short term capital gain count toward Roth IRA income limits?

However it doesn't count as earned income for that requirement. 

JoeD_CPA_CFP
Employee Tax & Finance Expert

Does short term capital gain count toward Roth IRA income limits?

Correct, a capital gain is not earned income. Earned income comes from sources like W-2s and Self-employment income.

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