Opinion
MEMORANDUM
EDWARD D. JELLEN, Bankruptcy Judge.
Paul Mansdorf, trustee in bankruptcy in the above-captioned case, has objected to the above-named debtor's claim of exemption for a Roth IRA in the sum of $5,000. The court will sustain the objection.
The court has concluded that the debtor's Roth IRA is not exempt under California Civ. Pro. Code § 704.115(a)(3), (b), or (e) (certain private retirement plans and accounts). In the first place, the Roth IRA is not a retirement plan. See, e.g., In re Lieberman , 245 F.3d 1090, 1093 (9th Cir. 2001)(finding that Cal. Civ. Pro. Code § 704.115(a)(1) was "intended to exempt retirement plans established or maintained by private employers or employee organizations, not arrangements by individuals to use specified assets for retirement purposes."); In re Simpson , 366 B.R. 64, 74-5 (9th Cir. BAP 2007).
Indeed, the debtor does not dispute that she, rather than any employer or employee organization, created the Roth IRA, and that she created it on March 1, 2010, only six weeks before the April 23, 2010 filing of her chapter 7 petition.
Nor has the debtor established that the Roth IRA is exempt as social security funds pursuant to 42 U.S.C. § 407. The debtor's only sources of income for the five years prior to the filing of the petition were monthly social security payments in the sum of $1,253 and monthly contributions from her daughter in the sum of $200. According to the debtor's Schedules I (Income) and J (Expenses), the debtor's monthly expenses were more than $700 in excess of the total of these payments. It is therefore difficult for the court to see how the debtor could have accumulated sufficient social security funds with which to fund the Roth IRA. Her papers opposing the trustee's objection provide no explanation as to how she might have done this, and the debtor concedes that she has no documentary evidence to support her claim.
Moreover, the debtor has failed to explain why, to obtain an exemption, she needed to fund the Roth IRA with social security payments, when such payments would have been exempt without the Roth IRA.
Nor does the Roth IRA qualify as an exempt retirement account under Bankruptcy Code § 522(b)(3)(c) (certain retirement funds). On the basis of IRS Publication 590, the trustee argues, persuasively, that a taxpayer can contribute to a Roth IRA only if the taxpayer has "taxable compensation, " as defined therein, with which to fund the Roth IRA. "Taxable compensation" does not include social security payments or contributions by a relative, and debtor admits that she had no "taxable compensation" as defined in IRS Publication 590.
The debtor argues that a Roth IRA need not be funded with "taxable compensation, " citing the fact that under IRS Publication 590, the annual contribution limit for a Roth IRA is $6,000 if a taxpayer, such as the debtor, is age 50 or older.
The debtor's argument confuses two different concepts. The maximum contribution to a Roth IRA is an issue separate and apart from the issue of a taxpayer's eligibility to contribute to a Roth IRA. Thus, the maximum amount the debtor could have contributed, if the debtor had had taxable compensation, is irrelevant.
The debtor argues that the 2010 tax year is not over, and that she may still earn some taxable compensation for "life coaching" her daughter "by providing perspective and general advice." The court rejects this highly contrived argument because, among other reasons, the exemption status of the Roth IRA funds must be determined as of the date of the debtor's bankruptcy petition. In re Kim , 257 B.R. 680, 685 (9th Cir. B.A.P. 2000), aff'd, 35 Fed.Appx. 592 (9th Cir. 2002).
For the foregoing reasons, the court will issue its order sustaining the trustee's objection to the debtor's claim of exemption as to the Roth IRA.