Deduct roth ira losses

Forum|Forum|6 years ago
May 19, 2020
4 replies
44 views

I have a ROTH IRA with a basis of $150,000- now worthless. I believe I can close the account and take the loss against my income taxes. Is that correct and will the losses carry forward- and how many years? Do you know how to get the info into turbotax?

Best answer by macuser_22

In 2017 and before it was possible to deduct a loss of unrecorded "basis" in the Roth when ALL existing Roth accounts are closed, as a miscellaneous itemized deduction subject to a 2% or AGI floor. It would not be of any benefit if you cannot otherwise itemize.

The TCJA (Tax Cuts and Jobs Act) eliminated that deduction for tax years 2018-2025. If you anticipate that you will be able to itemize in 2025 or later, and the loss will exceed the 2% AGI floor, you can leave a small amount in the Roth and not close it until the TCJA expires and that deduction is restored. (Of course there is not guarantee that Congress will not pass some other law.)

macuser_22

Answer

Alumni - Champ

**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.**

dmertz

Level 15

Nothing has changed since you asked the same question a year ago. It's still not deductible:

https://ttlc.intuit.com/community/retirement/discussion/are-losses-on-a-roth-ira-deductible-must-i-close-the-accounts-do-losses-carry-forward-will-they/01/181546