Recharacterization of Traditional Non Deductible IRA to Roth IRA at a Loss

[APVP]

I contributed  $7,000 in 2022 to Traditional Non Deductible IRA. By the time I recharacterized it to Roth IRA, its value dropped to $5,800. How I understand, I should be able to recognize the loss of $1,200, but TurboTax considers $1,200 as the balance of Traditional IRA. How should I enter data in TurboTax to see the loss? Thank you.

[dmertz · Accepted solution]

The Tax Cuts and Jobs Act of 2017 eliminated this deduction through 2025.

[APVP]

Thank you for the reply. I am reading Tax Cuts and Jobs Act and cannot find information about recharacterization. Could you please post that rule? Thanks again.

 

[dmertz · Accepted solution]

This would have to be claimed as a miscellaneous deduction subject to the 2%-of-AGI floor, but the TCJA eliminated this deduction for 2018 through 2025.

See section 67(g):  https://www.law.cornell.edu/uscode/text/26/67

[APVP]

Got it! Thank you so much.