Taxable IRA Distributions

[Guest Al Schut]

Is it possible to claim tax losses on stock purchased under an IRA if the stock is transferred to a regular brokerage account? I understand that regular income taxes must be paid on the distribution. (I'm over 62 1/2 years of age, and considering a lump sum distribution before age 70 1/2.)

[John Olsen]

If you mean "can I DEDUCT any loss in value which has occured in my traditional IRA account, on my Income Tax", the answer is NO.

On the other hand, you don't have to declare that lost money as income. Hypothetically, if there had been NO GAIN in the account, you'd actually get some tax relief from a loss in value, because you might have enjoyed a tax deduction for every dollar you contributed, but will have to recognize as income only the current value (amount contributed, less investment "loss").

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John L. Olsen, CLU, ChFC

Olsen Financial Group

St. Louis, MO

314-909-8818