Author Topic: Does money transferred from IRA to Roth count as income for IRA contributions?  (Read 686 times)

RedmondStash

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Hypothetically: I have no employment income in 2018. I do, however, transfer $5500 from my IRA to my Roth, which gets taxed as employment income.

Can I then consider that employment income, and contribute another $5500 to my IRA or Roth in 2018?

And if I can, and spouse (who also has no employment income) & I transfer $11,000 from IRAs to Roths, can we each contribute $5500 to an IRA or Roth in 2018?

Trying to wrap my head around how or whether I can keep contributing to my Roth or IRA after I'm no longer earning money from a job, given that money pulled from a traditional IRA is considered employment income for tax purposes.

Thanks.

MDM

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Hypothetically: I have no employment income in 2018. I do, however, transfer $5500 from my IRA to my Roth, which gets taxed as employment income.

Can I then consider that employment income, and contribute another $5500 to my IRA or Roth in 2018?
Yes it gets taxed but no, it isn't "compensation" so the short answer is "no".

See What Is Compensation?

RedmondStash

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Hypothetically: I have no employment income in 2018. I do, however, transfer $5500 from my IRA to my Roth, which gets taxed as employment income.

Can I then consider that employment income, and contribute another $5500 to my IRA or Roth in 2018?
Yes it gets taxed but no, it isn't "compensation" so the short answer is "no".

See What Is Compensation?

Thanks.