This was possible in prior years, however it's an itemized deduction and subject to the 2% of AGI limit. Those deductions are no longer available under Tax Cuts and Jobs Act (TCJA).
Traditional
It's all about basis Yes, that is a loss in value, but for tax purposes, a loss can be claimed only if there is "basis." Basis is money that has already been taxed. If the client received a tax deduction for his or her traditional IRA contributions, there is no basis, since that money has not yet been taxed.
Roth
Your
deduction is equal to the amount by which your tax basis exceeds your total
withdrawals from your Roth IRAs. Your tax basis is the total amount of your
contributions to the Roth IRA because these contributions are made with
after-tax dollars.
If this was your ONLY IRA and you closed it AND did NOT take the tax deduction for your contributions you may be able to claim some of the loss. I don’t know if the rules have changed for this.
That happened to my IRA one year. My 2,000 IRA deduction was in a limited partnership probably for a mall in Florida. This was back in the 80s I think when IRAs were a new thing. Can't take a loss because we have no tax basis in it. Nothing you can do about it. At least I got the tax deduction for my contribution.
This was possible in prior years, however it's an itemized deduction and subject to the 2% of AGI limit. Those deductions are no longer available under Tax Cuts and Jobs Act (TCJA).
Traditional
It's all about basis Yes, that is a loss in value, but for tax purposes, a loss can be claimed only if there is "basis." Basis is money that has already been taxed. If the client received a tax deduction for his or her traditional IRA contributions, there is no basis, since that money has not yet been taxed.
Roth
Your
deduction is equal to the amount by which your tax basis exceeds your total
withdrawals from your Roth IRAs. Your tax basis is the total amount of your
contributions to the Roth IRA because these contributions are made with
after-tax dollars.