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Roth IRAs and the Magical Disappearing and Reappearing Compensation Trick for Individuals with Foreign Earned Income
Bloomberg BNA Link to more items from this source
Oct. 1, 2014
"In determining compensation for purposes of the 'dollar limitation' applicable to Roth IRAs ... compensation does NOT include foreign earned income (nor any amounts excluded through the foreign housing exclusion).... On the other hand, ... foreign-earned income IS treated as income for purposes of ... the phase-out limit.... Under phase-out rules, the contribution limit for Roth IRAs may be reduced based on a combination of the amount of a taxpayer's modified adjusted gross income (AGI) and federal income tax filing status.... AGI is computed for purposes of the 'phase out limitation' without regard to the I.R.C.'s provisions excluding certain foreign earned income or housing costs from gross income."

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