"RHS" <rhsls1[at]cox.net> writes:

- quote -

In all likelihood, you don't.

It's pretty simple:
(1) If you've never made any non-deductible traditional
IRA distributions, there is no way to take a loss. Period.
Or looking at it alternatively, you "take the loss" by
virtue of having fewer assets to pay taxes on upon
withdrawal.

(2) If you've made some non-deductible trad IRA contributions
AND if you liquidate ALL your trad IRA accounts AND if the
amount you get from liquidation is less than all your non-ded
contributions, you get a misc itemized deduction for the
difference between liquidation value and your non-ded
contributions.

- quote -

No.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

RHS wrote:

- quote -

You recognize the loss as a miscellaneous itemized deduction on
Schedule A.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"RHS" <rhsls1[at]cox.net> wrote:

- quote -

Unless you never deducted any of your contributions you do
not have a loss.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

rhsls1[at]cox.net (RHS) posted:

- quote -

There is no way to take a loss on an IRA. In return for the
tax advantages conferred (sheltered growth until w/d after
retirement, _no_ future taxes on any gains for the Roth,
etc.) -- the quid pro quo is that the IRA is an entirely
discreet entity. Nothing that happens within the IRA
affects your income taxes; you only pay the [traditional
IRA] taxes on amounts you withdraw.

For those whose investments grow, this is very helpful. In
your unfortunate case, it's frustrating. If this had
happened in the year of your contribution, there would have
been an option to _re-charaterize_ the investment ... but
once the contribution has "aged" there is no recourse.

Bill

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

RHS <rhsls1[at]cox.net> wrote:

- quote -

First you must have completely liquidated the IRA.

Then you must have some tax basis in that IRA. Think of tax
basis as the nondeductible contributions made to that IRA.

The loss is the diference between tax basis and the total
amount of distributions taken from the IRA. It goes on
Schedule A as a misc deduction subject to 2% of AGI
reduction.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

- quote -

With great difficulty. You can only take them if you
liquidate all your traditional IRAs and your aggregate loss
is greater than your unrecovered basis (after tax
contributions). Then, it is a misc. itemized deduction
subject to the 2% of AGI limitation.

If you have no basis in the IRA, then all the money was
pretax anyway. No way you can get a deduction for that.

- quote -

If you are not 59 1/2, most likely.

- quote -

No.

- quote -

IRS Pub 590 page 36.

All freely provided advice guarantee correct or double your
money back

Frank S. Duke, Jr. CPA
Cincinnati, OH USA

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

You did not pay tax on it in the first place, thus you do
not get to deduct it now.

Missy Doyle

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

RHS wrote:

- quote -

Not a casualty loss. If the funds contributed to the IRA
were all deductible (in the year contributed) you have no
"basis" in the account. Your "deduction" is that you do not
have to pay tax on the money you lost.

Unless your traditional IRA contained after-tax
(nondeductible) contributions, which would be documented
through the form 8606s filed, you have no deduction of ANY
type to claim.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Hello,

I have an IRA in which I have a loss of ~$18000 and a value
of $4000. How do I go about taking this loss, understanding
that capital losses on the sale of an IRA can't be taken.
If I sell the position and take a distribution, I understand
I will pay ordinary tax on income and a 10% penalty for
early distribution...can I take the loss as a Casualty loss?
I would appreciate some input or at least guidance on
further research.

Thanks,
Rob

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >