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Level 3
posted Jan 5, 2024 6:45:22 AM

Using carryover Capital loss in a IRA or 401k distribution

If I have capital gains in a retirement account, when I take a distribution, can I use my carryover capital loss to offset the capital gains in that distribution, or does it just become a normal distribution that is fully added to my income for tax purposes?

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2 Best answers
Level 15
Jan 5, 2024 7:38:26 AM

As a result of the Tax Cuts and Jobs Act, the option to claim a loss on IRA investments is no longer available as of 2018.

Level 15
Jan 5, 2024 1:23:55 PM

Gains and losses within a retirement account are not reportable.  Distributions from a retirement account are ordinary income and are not subject to any capital-gains treatment.

4 Replies
Level 15
Jan 5, 2024 7:26:49 AM
Level 15
Jan 5, 2024 7:38:26 AM

As a result of the Tax Cuts and Jobs Act, the option to claim a loss on IRA investments is no longer available as of 2018.

Level 15
Jan 5, 2024 9:18:11 AM

for as long as there have been IRAs capital gains and losses inside an IRA are never recognized by the beneficiary. Those capital gains become ordinary income when you take a distribution.  there was a provision, since repealed, that allowed recognizing a loss under certain conditions.

 

Level 15
Jan 5, 2024 1:23:55 PM

Gains and losses within a retirement account are not reportable.  Distributions from a retirement account are ordinary income and are not subject to any capital-gains treatment.