Brent D. Gardner, ChFC wrote:
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No alimony here.

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No alimony here.

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No alimony here.

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Plus alimony.

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Show me the money (alimony) in the definition of "earned income." Nice
transcription, though.

- quote -

--
Mark Freeland
nBeOwXs[at]pacbell.net


======================================= MODERATOR'S COMMENT:
If further comments neccesary, suggest either a dedicated tax forum or private correspondence.

"Mark Freeland" <nBeOwXs[at]pacbell.net> wrote in message
news:5pmAd.3439$5R.3402[at]newssvr21.news.prodigy.com...
- quote -

Compensation includes wages, salaries, tips, professional fees, bonuses, and
other amounts received for providing personal services. It also includes
commissions, self-employment income, and taxable alimony and separate
maintenance payments. For more information, see What Is Compensation? under
Who Can Set Up a Traditional IRA? in chapter 1.

Earned income includes all of the following types of income.

1. Wages, salaries, tips, and other taxable employee pay. Employee pay is
earned income only if it is taxable. Nontaxable employee pay, such as
certain dependent care benefits and adoption benefits, is not earned income.
But there is an exception for nontaxable combat pay, which you can choose to
include in earned income, as explained below.

2. Net earnings from self-employment

3. Gross income received as a statutory employee.

So, what is compensation? EARNED INCOME. They are one and the same.

There's no misconception on my part. =)

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/
http://www.topgunproducers.com/
http://forum.topgunproducers.com/

Si vis pacem para bellum!

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

"Brent D. Gardner, ChFC" <bgardner20[at]cox.net> wrote in message
news:U7lAd.11562$c%.2229[at]okepread05...
- quote -

A common misconception. The IRS requires "compensation", which is different
from "earned income". The former includes alimony, though I agree with you
that it is hard to envision a 9 month old getting alimony.
http://www.irs.gov/publications/p590/ch01.html#d0e960 ("Compensation")
http://www.irs.gov/publications/p596/ch01.html#d0e1032 ("Earned Income")

I wonder what "sweat of the brow" chores a 9
- quote -

--
Mark Freeland
nBeOwXs[at]pacbell.net

"jdadverb" <jdadverb[at]yahoo.com> wrote in message
news:1104268670.618650.190500[at]z14g2000cwz.googlegroups.com...
- quote -

Earned income, to be specific. I wonder what "sweat of the brow" chores a 9
month old can do? =)

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/
http://www.topgunproducers.com/
http://forum.topgunproducers.com/

Si vis pacem para bellum!

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

"John Brayton" <johnbrayton[at]gmail.com> wrote in message
news:1104256023.673928.215910[at]f14g2000cwb.googlegroups.com...
- quote -

Ideally, eh? I take issue with this recommendation. One word: Spendthrift.

Barring significant tax issues (i.e., where estate planning starts at
birth), parents should try to keep as much money in their names as humanly
possible, and NOT in the child's name.

Why? Several reasons, beyond what should be the obvious:

1. Financial aid calculations favor the parents and grandparents that
avoided poorly thought out gifts. So think first, or seek advice, before
acting.

2. Money in a kids name counts against the student SEVEN times MORE when
applying for financial aid, than does money in the parents name.

3. 18 year olds can spend money faster than a tax & spend liberal democrat,
with similar returns on their frivolity. Parents should have some control.

There will be people who disagree with me, but I've watched what happens
when kids get cash literally thousands of times, and the results SHOULD give
pause to parents and grandparents.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/
http://www.topgunproducers.com/
http://forum.topgunproducers.com/

Si vis pacem para bellum!

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

Doesn't he have to have income in order to invest in a Roth IRA?
- J.

John Brayton wrote:
- quote -

I would recommend two types of accounts:

-A 529 account offers tax advantages for money saved towards college:
http://money.howstuffworks.com/529.htm
-A Roth IRA account offers tax advantages for money saved towards
retirement:
http://www.rothira.com/

Obviously college will be the more immediate expense. However, a Roth
may actually provide the better long-term benefit. That's a trade-off.

If at all possible, I would advise keeping the money in a bank or
investment account just for him -- ideally in his name. He should
receive not only the money, but also to the earnings on that money.
Keeping the money his own account, or an account just for him, will
allow you to track that far more easily.

John

jdadverb wrote:
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What is the advantage of Coverdell ESA?

I'm guessing this may be one of those questions whose answer is "it
depends on your specific situation," but I'll go ahead and ask it
anyway. My 9 month old son received a check from his grandfather for
$2000. I understand I can create a custodial account for him at Schwab
or Vanguard. I've heard, though, that long-term when he's trying to
qualify for financial aid for college, it may not be a good idea for
him to have substantial assets in his name.

I can think of a few options:

1) Custodial account with Schwab/Vanguard or a regular bank
2) Make it his Coverdell IRA contribution for next year (I've already
invested the max for him this year)
3) Have my father write a new check to me and I'll just keep an
"account" for him in a spreadsheet once he's old enough to actually
have things he wants to buy (and an appreciation for the value of
money).

Thanks!