Assuming that you mean that the loss was from investments within the IRA:
One of the advantages of an IRA is that the money can grow tax free since you are not taxed on any gains within an IRA, but on the other hand you also cannot claim any losses within the IRA either.
But there is one exception:
If you have a loss on your traditional IRA investment, you can
recognize (include) the loss on your income tax return, but
only when all the amounts in all your
traditional IRA accounts have been distributed to you and the total
distributions are
less than your unrecovered basis, if any.
Your basis is the total amount of the nondeductible contributions in your traditional IRAs.
You claim the loss as a miscellaneous itemized
deduction, subject to the 2%-of-adjusted-gross-income limit that applies
to
certain miscellaneous itemized deductions on
Schedule A (Form 1040). Any such losses are added back to taxable income
for
purposes of calculating the alternative minimum
tax.
In the case of a rollover IRA (assume that it was a 401K rollover) then it is not likely that there is any basis (after-tax money) in the IRA at all. Even when there is basis, for most people the amount is small and not likely to exceed 2% of AGI.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
