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Can I Take a Tax Loss on a Roth IRA?

Q: My Roth IRA, on which taxes were already paid, has lost a lot of money. Can I take a tax loss on this?

A: Not while you still have ANY Roth IRA accounts.

When you liquidate the last of your Roth IRA accounts, if you get back less than the amount you converted and/or contributed, there is the potential to take a loss, which is counted as a miscellaneous deduction on line 22 of Schedule A.

These questions are actual inquiries submitted by taxpayers to our AARP Tax-Aide Program. The AARP Tax-Aide Program is a volunteer-run, free tax-preparation and assistance program offered to low- and middle-income taxpayers with special attention to those age 60 and older. Our volunteers are trained and IRS-certified to understand individual federal-tax issues. Our volunteers provide tax assistance as a public service and cannot guarantee the accuracy of the information provided.

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