close out roth account

[skylab 1]

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???

[JohnB5677]

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?

[skylab 1 · Accepted solution]

 MY QUESTION. IT IS A ROTH ,COMPLETE CLOSE OUT ,CAN YOU TAKE A TAX LOSS???? And ON WHICH FED TAX FORM/

PLEASE ANSWER

[JulieS]

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:

1. Select Federal from the left side menu.
2. Select Deductions and Credits toward the upper left. 
3. Expand the list and scroll down to Retirement and Investments.
4. Expand the section and click Start to the right of Traditional and Roth IRA Contributions. 
5. Check the type of IRA accounts you have and then answer the questions about contributions. 
6. When you get to Let Us Track Your Roth IRA Basis, answer Yes.
7. Answer the remaining questions in this section to report your IRA basis. 

[skylab 1 · Accepted solution]

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?????

[DanaB27]

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.

1. Click on "Search" on the top and type “1099-R” 
2. Click on “Jump to 1099-R” and enter all your 1099-Rs
3. Click "Continue" on the "Review your 1099-R info" screen
4. Answer all the questions and make sure you enter the net contributions prior to 2021 on the "Enter Prior Year Roth IRA Contributions" screen
5. Answer the remaining question.