Short term and long term losses in Roth IRA, tax implications

[STPETEJACK]

Hello,

I have a situation I need to address in my Roth IRA.

One company I invested in (long term) is nearly a total loss, and could go bankrupt at any time.

I have other small holdings in the Roth, long term.

However, I have a short term holding which was for 7k, max for the year allowed, but now down 2500 on that one as well.

Everything I've read says I have to liquidate the Roth completely in order to take the tax deduction.  I could also benefit from a couple more years of tax harvesting.

I guess I'm willing to lose the $2500 short term loss to benefit from the long term losses, especially on the one stock that could liquidate at any time. As it stands today, I'm still able to trade it.

Am I correct in saying I can liquidate my Roth and claim it as described above?

Can I still hold my   traditional IRA that I would not close and still do this, or do I have to liquidate ALL my IRA's? 

Thanks for advice.

[VolvoGirl]

Sorry you can no longer deduct ROTH IRA losses after 2017.  Misc deductions have been suspended 2018-2025.  See this on deducting losses on Roth IRAs

https://turbotax.intuit.com/tax-tips/investments-and-taxes/are-losses-on-a-roth-ira-tax-deductible/L...

[dmertz]

As VolvoGirl said, miscellaneous deductions subject to the 2%-of-AGI floor are suspended until 2026.  If the suspension of these deductions is lifted as scheduled, you could wait until then, make a complete distribution of all of your Roth IRAs and then take the deduction for the unrecoverable basis to the extent that all of such miscellaneous deductions that you have exceed 2% of your AGI.  This can only be done if you itemize deductions.  Note that the standard deduction is also scheduled to revert to former levels in 2026, so itemizing will be more likely then.

If you expect that the investment in the Roth IRA will continue to drop in value, change the investment but don't distribute it from the Roth IRA, at least not right now.

[STPETEJACK]

thanks for response.