Harlan Lunsford wrote:

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- quote -

Actually I put client in parenthesis, meaning I thought it
your teen aged son, since you had previously posed questions
concerning his earnings going into IRA maybe two years ago.
But then, he may not even be a teenager any longer! Lol

ChEAr$,
Harlan

Moderator: He's 15.

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Phil Marti wrote:
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It just dawned on me who dick's "client" might be. (grin)

So in this case, assuming the "client" is a teenaged son,
his loss would only be deductible on his own schedule a.

How 'bout that, Dick?

ChEAr$,
Harlan

Moderator:
Moi have a client? No way and my son's money is in mutual
funds. This was a question posed to me by one of the many
people suffering from the delusion that I know taxes.

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Dick Adams wrote:

- quote -

TP would have to close out ALL Roth IRA accounts and, if a loss then
existed, it might be deductible as an itemized deduction (subject to 2%
reduction based on AGI).

"Jack"-

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Dick Adams wrote:

- quote -

Rule for any IRA, Roth or not, is that any loss is
recognized when all such accounts are closed.

Of course if all IRA's were result of tax deductions over
the years, then there is no loss. But if any of the
"regular" IRA's were mixed, deductible and non deductible
OR ROTH in nature, then this is the rule.

ChEAr$,
Harlan Lunsford, EA n LA

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rdadams[at]smart.net (Dick=A0Adams) posted:

- quote -

My understanding is that an IRA, by definition, is
firewalled from all tax consequences until distributions are
taken, and from a Roth, there would be no tax consequence at
all -- assuming the 5-year and age requirements are met.

There has been previous discussion of a re-characterization
option when severe losses occurred within a tax year -- but
I believe that option expires with the tax year. Thus, at
this point, a 2004 contribution is properly secluded in its
"protected" (non-tax) status, and thus any current paper
losses cannot be _realized_ by selling the investments
involved, and establishing a loss for tax purposes.

Bill

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"Dick Adams" <rdadams[at]smart.net> wrote:

- quote -

If this isn't hypothetical, he must be paying a fortune in
unnecessary fees.

Anyway, if he liquidates ALL his Roth accounts and winds up
with less than the total of contributions and conversions,
he has a Schedule A miscellaneous itemized deduction.

--
Phil Marti
Clarksburg, MD

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Dick Adams wrote:

- quote -

Yes, but not until total disbursement (and it will be a
Schedule A deduction).

Say I have a $10,000 basis in a Roth and it drops in value
to $6,000--if I only take a $5,000 distribution, I can't
claim a deduction (yet). Only when you have closed the
position and fully realized the loss will you get the
deduction.

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Taxpayer opens a new Roth IRA every year. His 2004 Roth IRA
is now worth about $120. Is there anyway to deduct the loss?

Dick

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