Long term capital loss

Forum|Forum|6 years ago
March 20, 2020
1 reply
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I opened a Precious Metals mutual fund with $18,000 in 2010. By 2014 its value dropped to about $7500, at which time I converted $6500 of it to a Roth IRA. Last year I closed out the account and moved the balance ($8800) to a different IRA account. Can I claim any of the loss as a long term capital loss?

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RobertG

Level 12

The Internal Revenue Service does not permit you to deduct losses from your Roth IRA.

Please see the TurboTax website: Are Losses on a Roth IRA Tax Deductible?

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VolvoGirl

Level 15

What kind of account did you originally open? Was it a regular IRA Account or just a personal mutual fund account? You would only convert from a Traditional IRA. Or It would be a new contribution to a ROTH. Either way you should have reported something on your 2014 return and it should have been a taxable event. @dmertz

SwampfoxAuthor

Level 2

It started out as a regular personal non-IRA mutual fund in 2010. In 2014 I initially converted it to a traditional IRA, then a month or so later, converted it to a Roth, don't ask me why. It must have seemed like a good idea at the time. At least, this is what I think happened based on my documents. I looked back and did not find anything in my 2014 taxes related. I probably thought since it was going into an IRA, I wouldn't need to worry about it at that time.

I understand that the IRS does not allow us to claim losses on an IRA fund, but is that still true if a fund started out as a personal non-IRA fund, lost money, then was converted to an IRA? Could I have reported a capital loss in 2014, or now, or is that not possible once it became an IRA?

Many thanks!