Withdraw from a ROTH

[Guest JimC]

Hi Everyone, I just have a quick question regarding the withdraw from a ROTH IRA. I opened a Roth last year ($2000) and now it has lost 25% of its value. I recently had to purchase hearing aids

that I just put on my credit card (over $2k). And now to my question...Can I use what is left in my Roth account to pay for my hearing aids without there being a penalty?

Thanks in advance.

[BPickerCPA]

Assuming this is your only Roth account, not only can you pull out the balance with no tax or penalty, but you can take a miscellaneous itemized deduction for the account loss.

[Fred Payne]

Barry:

Something I never knew about Roth IRAs: the deductability of losses. Where can I read up on this fact?

[Guest Taxwoman]

AS YOU CANNOT ADD IRA EARNINGS TO YOUR INCOME ( EARNINGS ARE TAX DEFERRED OR TAX FREE FOR ROTHS) YOU CANNOT TAKE A DEDUCTION FOR LOSSES ON IRA INVESTMENTS ( EXCUSE THE CAPS- MY PC IS LOCKED ON CAPS- WAITING TO BE FIXED)

[BPickerCPA]

Fred,

You can find the info in Pub 590.

Taxwoman,

You can't deduct losses in your IRA, but if you terminate an IRA in which you have basis (non deductible contributions in a traditional; conversions and contributions in a Roth), and receive less than the basis, you may take the loss as a miscellaneous itemized deduction subject to the 2% threshhold.