Can I deduct losses in my Roth account without liquidating?
September 21, 2005
Subject: Roth IRA Loss
Date: Wed, 7 Sep 2005
From: Dick
I lost $2,000 on an investment held in a Roth account. The investment represents about 14% of the account. Can I deduct the loss without totally liquidating the account?
I will appreciate hearing from you on an issue that has long been a source of dispute/question.
Answer
Date: Wed, 14 Sep 2005
Hello Dick,
No. You must totally liquidate ALL of your Roth accounts to report a loss. Not only that, losses from totally liquidated Roth accounts are miscellaneous itemized deductions, and are reduced by 2% of adjusted gross income. See IRS Publication 590.
Good luck!
Mike Gray
For more information about Roth and traditional IRAs, buy our book: How to use Roth & IRA accounts to provide a secure retirement, 2012 Edition!
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