Professional trader IRA contributions
I’m looking for some authority for the proposition in the Investment News article that professional traders can make IRA contributions even though the income is not subject to payroll taxes. Any help appreciated.
Permalink Submitted by Alan Spross on Mon, 2011-04-25 21:29
The exemption from SE taxes is not critical, however the definition of net earnings from SE per Sec 1402(a)3 excludes gains or losses from the sale of capital assets. Same for the collection of rental income, dividends, etc. Therefore, it appears that day (active) traders are not allowed to make IRA contributions under any of the various IRA plans.
But I am not aware that the IRS has made any specific guidance in this area.