"The IRS requires that a Roth IRA contributor have earned income at least equal to the contribution amount for that tax year. The source of the funding, whether the daughter's own paycheck or a gift from her father, is irrelevant."
"If she's using the foreign earned income exclusion, the FEIE, and she's using that and has no earned income in the United States, then the answer is likely no, you can't do it."
To contribute to a Roth IRA, a U.S. citizen must have earned income equal to the contribution amount. For Americans in Germany, this depends on their tax strategy. They can use the Foreign Earned Income Exclusion (FEIE) to exclude foreign wages from U.S. taxable income or the Foreign Tax Credit (FTC) to offset U.S. tax liability. The choice between FEIE and FTC affects eligibility for Roth IRA contributions, as using FEIE may disqualify them if no U.S. earned income exists.
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