topic Don't fully qualify for Roth IRA, but investment lost significant value in Deductions & credits

Don't fully qualify for Roth IRA, but investment lost significant value

Misse123 — Mon, 09 Mar 2026 06:22:59 GMT

For 2021, I don't fully qualify for a Roth IRA, $1530 of the $6000 contribution needs to be withdrawn before the due date of my return. However, that investment has lost over $4000 so I'm trying to determine if I do need to withdraw $1530, or how much to withdraw, and if there is a way to keep my cost basis.

Re: Don't fully qualify for Roth IRA, but investment lost significant value

DanaB27 — Sat, 05 Feb 2022 19:45:57 GMT

Please make sure that you requested a withdrawal of the excess contribution plus earnings with your financial institute to get correctly coded 1099-R. Your financial institution should be able to calculate any earnings or losses.

Please see Excess Roth contribution because of MAGI for additional options about your excess contribution.

Re: Don't fully qualify for Roth IRA, but investment lost significant value

Misse123 — Wed, 09 Feb 2022 22:01:54 GMT

Thanks @Dana, if I recharacterize to a Traditional IRA, can I then do a backdoor Roth IRA?

Re: Don't fully qualify for Roth IRA, but investment lost significant value

JulieS — Wed, 09 Feb 2022 23:40:30 GMT

Yes, at this moment you can roll the recharacterized amount to a Roth IRA.

The Build Back Better plan has provisions to close this loophole, but as of today it has not passed the Senate.