A:



You can close your Roth IRA account without negative consequences if your total account balance is less than the accumulated amounts you deposited as regular contributions. Furthermore, if you distribute the total balance, you may be able to deduct the losses on your tax return.



For more information from the IRS on this matter, see "Recognizing Losses on Investments" in IRS Publication 590. (To learn more about retirement plans in general and the Roth IRA in particular, read A Tour Through The Different Retirement Plans.)



This question was answered by Denise Appleby
(Contact Denise)



RELATED FAQS
  1. Do I have to stop contributing to my second Roth IRA?

    I have a regular IRA and Roth IRA with a brokerage firm as well as a 401k Read Answer >>
  2. Can I deposit a taxed distribution from my traditional IRA into my Roth IRA?

    I open a Roth IRA at age 70 1/2. I get a taxed distribution from my traditional IRA, but I don't need all that money. Can ... Read Answer >>
  3. Should I reinvest my dividends into my Roth IRA?

    I have two brokerage accounts, one is an individual account the other is a Roth IRA. I am thinking about using my dividends ... Read Answer >>
  4. I have two Roth IRAs, one of which has a balance that is much less than the total ...

    It depends. You are eligible to write off the losses only if the balance for both of your Roth IRAs (combined) is less than ... Read Answer >>
  5. Can I close my existing Roth IRA and invest in a new Roth IRA at a different financial ...

    If If you withdraw your Roth IRA contribution, the amount will be tax and penalty free. If your initial contribution accrued ... Read Answer >>
  6. My certificate of deposit (CD) has just matured and I plan to contribute $10,000 ...

    Your regular Roth IRA contribution can't exceed $4,000 annually. If you are at least age 50 by Dec 31, 2005, you can contribute ... Read Answer >>
Related Articles
  1. Retirement

    How a Roth IRA Works After Retirement

    What retirees need to know about taxes, distributions and passing on your unspent savings to the next generation.
  2. Retirement

    Don't Make These Top 10 Mistakes On Your Roth IRA

    Don't lose out on the benefits of a Roth by contributing too much, breaking rollover rules or making other avoidable errors.
  3. Retirement

    Funding Your IRA vs. Your Roth IRA, Which First?

    The answer depends on where you are in your career and personal life each year. Here are some scenarios and rules to think about.
  4. Retirement

    Roth 401(k) Vs. Roth IRA: Which One Is Better?

    It all depends on your age, your income - and your plans for your retirement nest egg.
  5. Retirement

    Roth IRA Contribution Limits in 2016

    Discover the benefits of Roth IRA accounts and how much you can contribute for your retirement. Learn which IRA plan is best for you.
  6. Retirement

    Roth vs. Traditional IRA: Which Is Right For You?

    To answer this question, you need to consider several of the factors we outline here.
  7. Retirement

    Why You Should Have a Roth IRA

    The world of retirement savings plans is filled with options. Here are the reasons why you should consider a Roth IRA when saving for retirement.
  8. Retirement

    5 Secrets You Didn't Know About Roth IRAs

    Between its generous tax benefits at retirement and no required minimum distributions, a Roth IRA is well worth considering if you're eligible to have one.
  9. Retirement

    Deducting Losses On Your IRA Investments

    In regular accounts in which taxes are not deferred, losses on investments can be included on your tax return. Find out how.
  10. Retirement

    How to Use Your Roth IRA as an Emergency Fund

    Do you feel like you don’t have enough money to save for emergencies and also save for retirement? An often-overlooked feature of the Roth IRA could solve your problem.
RELATED TERMS
  1. Roth IRA

    An individual retirement plan that bears many similarities to ...
  2. Roth IRA Conversion

    A reportable movement of assets from a Traditional, SEP or SIMPLE ...
  3. Backdoor Roth IRA

    A method that taxpayers can use to place retirement savings in ...
  4. Individual Retirement Account - IRA

    An investing tool used by individuals to earn and earmark funds ...
  5. Ordering Rules

    The order in which Roth IRA assets are distributed. Assets are ...
  6. Qualified Distribution

    Distributions made from a Roth IRA that are tax and penalty free. ...
Hot Definitions
  1. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  2. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  3. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  4. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  5. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  6. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
Trading Center