Traditional IRA account closed because of $0 balance

[rina_k]

My traditional IRA account was closed by my brokerage because I basically lost the entire amount (stock market loss) and had $0 balance remaining. They closed it without informing me and I came to know after the fact. Can IRS penalize me because my brokerage closed my $0 balance traditional IRA account? How can the traditional account closure be handled in turbo tax? Can I claim the losses since I lost my entire basis?

[macuser_22]

There is nothing for you to pay or report.

Sorry, IRA losses can no longer be claimed from 2018-2025 because of the Tax Cuts and Jobs Act of 2017.

In any event, that deduction would be an itemized deduction anyway and would do nothing unless you had more deductions than your standard deduction and first reduced it by 2% of AGI.

[Critter-3]

First there is nothing to report on the tax return.  And the loss cannot be deducted any longer either ... this is just the risk you take by investing in an IRA.  If the IRA was being managed by a custodian then you may have a legal recourse ... seek a local attorney.

https://www.investopedia.com/articles/retirement/05/012505.asp

[VolvoGirl]

Did you take a tax deduction when you made the contributions?   At least you got that.

[rina_k]

Thank you