Roth IRA conversion tax loss

[Guest daddybob]

I converted a traditional IRA to a Roth in 1999, invested in tech stocks, and still have a paper loss of more than $5000. I want to take an un-qualified distribution, and subsequent tax loss. I understand that I must close out all Roth IRAs. Do I need to close my non Roth accounts? How do I close my Roth accounts so the statements reflect my loss, not an un-qualified taxable distribution? Thanks for your help, bob

[John G]

You should talk to your local tax preparer or accountant who knows the details of your circumstances. For most folks, it just doesn't make sense to close accounts to take a tax loss that may perhaps be worth $1,000. Generally, you just can't flip the switch and reload the Roth. Your qualification may change or Congress may change the rules. Roths and IRAs are tax sheltered accounts and the rules governing them make it difficult to take any tax loss.

If you feel that your tax loss is significant and you have very little in your accounts - go see your local professional, who can advise you on the details.

[Appleby]

…and if your tax/financial advisor, along with your, determine that you should close the accounts and write off the losses, you need not close your traditional IRAs. For this purpose, traditional and Roth IRAs are treated separately .