Terminated Roth with Losses

[Guest fsokolowski]

Looking at passed posts there is a consensus Terminated ROTH Ira losses can be taken, and it is in Pub 590, I cannot seem to find it, I emailed the irs and they stated"there is nothing in either pub 590 or pub 529 allowing a taxpayer to take

this as an itemized deduction. the only expenses associated with an ira would be investment

fees & expenses you paid for managing your investment that produced taxable income, or

ordinary & necessary trustee's administrative fees that are billed separately & paid by you

in connection with your ira. see pub 529, pages 9 & 10. "

If someone can point me to where it says you can take a loss on a terminated IRA I would appreciate it.. I think we will see some of them this year, and it does seem logical TNX Fred EA

[JAMES PATRICK]

It does not explicitly say you can take a loss in the Roth section. What it does say is that the same rules apply to Roth as traditional UNLESS those explained in the Roth section are different.

To take the loss you must close ALL your Roth's and the loss is deductible on Schedule A, subject to the 2% limitation.

There was a post on this board within the last 12 months or so where the poster mentioned that an IRS spokesperson at a California conference for some group had discussed it.

[Guest fsokolowski]

Thanks Jim, I agree with you re ROTH and Traditional, but could not find anyplace that if you terminate a Traditional with Basis and take a loss you can take subj to 2% my problem is I need to have it from a pub as a class I am teaching has an email frmom IRS that says you cannot. Thank you Fred

[Mary Kay Foss]

Notice 89-29 (1989-1 C.B. 662) Q&A 7 indicates that a loss is possible from an IRA. At a liaison meeting between the CalCPA Taxation Committee and the IRS on 11/24/98, the IRS cited the notice and indicated that the loss would be deducted from gross income. Pub 590 for 2000 at Page 29 says such a loss is an itemized deduction. We're meeting with the IRS next month again and we've asked for clarification but they don't always answer the tough questions.