Funding a Roth IRA with poker winings

Gimpy · #1 09-22-2006, 05:14 AM

I am 45 years old with zero debt. I paid off my car loan last year and my home mortage this month. I have no credit card debt and will max out my $15,000 limit 401(k) contributions this year. My portfolio consists of $58,000 in mutal funds and money market accounts,a Roth IRA account of $8000, and $20,000 in CD's.

Playing 10-20 to 30-60 B&M limit poker I consistantly win $500-$1000 per month.

Should I use this money to fund my Roth IRA or my mutal fund/money market account? Both accounts have about the same rate of return.

Gimpy · #2 09-22-2006, 05:28 AM

I just read that a Roth IRA may only be funded my 'earned income'. Poker winings are not earned income.

Suppose $60,000 of earned wage/salary and $4000 in poker winings go into my checking account. I now have $64,000 in my checking account. If $4000 comes out of my checking account and into a Roth IRA, who is to say that the $4000 is not earned income? Who cares?

Dazarath · #3 09-22-2006, 06:24 AM

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Suppose $60,000 of earned wage/salary and $4000 in poker winings go into my checking account. I now have $64,000 in my checking account. If $4000 comes out of my checking account and into a Roth IRA, who is to say that the $4000 is not earned income? Who cares?

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It doesn't matter. It's not like you can say a specific dollar came from your employer or from a poker site, especially when it's all just electronic numbers anyways. I think the wording might even be that you can contribute to a Roth IRA up to the amount of your earned income (with a max of $4000 or whatever), not you must contribute earned income and not any other type of money.

Also, $4000 in poker winnings usually means a lot more in terms of AGI, since it's likely to have come from combinations of winning and losing sessions.

punkass · #4 09-22-2006, 09:58 AM

yea, as long as you have earned income, you can fund the Roth IRA. Doesn't matter about anything else.

tgo007 · #5 09-22-2006, 01:38 PM

So, someone who is a full time poker player and doesn't do anything else wouldn't be able to fund a Roth IRA?

balkii · #6 09-23-2006, 07:08 PM

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So, someone who is a full time poker player and doesn't do anything else wouldn't be able to fund a Roth IRA?

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AFAIK, this is correct

xwillience · #7 09-23-2006, 07:58 PM

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So, someone who is a full time poker player and doesn't do anything else wouldn't be able to fund a Roth IRA?

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AFAIK, this is correct

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even if they filed pro?