What type of income does a traditional IRA primarily consist of?

A traditional IRA primarily consists of deductible contributions, which are contributions made to the account that can reduce the account holder's taxable income in the year the contribution is made. This means that individuals can contribute a certain amount to their traditional IRA and deduct that amount from their taxable income, subject to IRS limitations and eligibility requirements.

Deductible contributions are a key feature of traditional IRAs, allowing taxpayers to potentially lower their tax liability while saving for retirement. The funds in the IRA can grow tax-deferred until they are withdrawn, typically during retirement when the individual may be in a lower tax bracket.

When considering the other types of income mentioned, capital gains and qualified dividends relate to gains and distributions from investments rather than the contributions made to the IRA itself. Rental income also does not align with the income associated with a traditional IRA, as that income is derived from real estate investments and not from the retirement account contributions. Therefore, the primary focus on deductible contributions is what defines the income of a traditional IRA.