Yes. Losses from a business are considered ordinary income and therefore can be used to offset other income taxed at the ordinary income tax rates.
The net operating loss carry forward from a prior year would be reported on Schedule 1, line 8a which would then flow into your Form 1040 and potentially reduce your overall income, which would include an IRA withdrawal if applicable. Please see IRS Publication 536 for more details on how the net operating loss needs to be reported.
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