I CLOSED OUT MY ROTH ACCOUNT OCT 2022 AFTER LARGE LOSS. MY ORIGINAL INVESTMENT WAS AROUND $35,000 BEGINNING JAN 2021 IS WAS $3344.00 CLOSED OUT $5503.00 IT APPEARS IRS IS CHARGING MY AS A GAIN ANT TAXING ME. IS THER SOMETHING WRONG???
MY QUESTION. IT IS A ROTH ,COMPLETE CLOSE OUT ,CAN YOU TAKE A TAX LOSS???? And ON WHICH FED TAX FORM/
PLEASE ANSWER
That does not sound correct. Please clarify the question.
Was it a total distribution?
What is the code in box 7?
Is this an IRA?
MY QUESTION. IT IS A ROTH ,COMPLETE CLOSE OUT ,CAN YOU TAKE A TAX LOSS???? And ON WHICH FED TAX FORM/
PLEASE ANSWER
No, that deduction is no longer available. The Tax Cut and Jobs Act of 2017 eliminated the deduction for a fully distributed Roth account.
The one thing you can do to minimize your tax is to enter your Roth basis in TurboTax. This is how to do that:
MY ROTH ACCOUNT WAS A CASH CONTRUBUSION OF $35,000. WHEN I CLOSED IT OUT IONLY HAD
LITTLE LESS THEN $5000.00 CAN I TAKE THE LOSS AS A TAX DEDUCTION?????
As JulieS mentioned you cannot deduct a loss but when you enter your net contributions during the interview none of the distribution should be taxable on line 4b of Form 1040.