A:

It depends. You are eligible to write off the losses only if the balance for both of your Roth IRAs (combined) is less than your aggregate contributions and conversions to both Roth IRAs, and you distribute the entire balance of both Roth IRAs.



The loss is claimed on your Form 1040 - Schedule A as an itemized deduction. However, it is subject to the 2% adjusted gross income limit that applies to certain miscellaneous itemized deductions.



See Deducting Losses On Your IRA Investments for more on this topic



Question answered by Denise Appleby, CISP, CRC, CRPS, CRSP, APA



RELATED FAQS
  1. When you have opened up a backdoor Roth IRA can you make regular monthly contributions ...

  2. I inherited a Roth IRA. What are my options for taking distributions from the account?

    It depends. Generally, if you are the spouse of the Roth IRA owner and you are the sole primary beneficiary, you may treat ... Read Answer >>
  3. Can I still contribute to my Roth IRA if my spouse earns over the requirement cap?

    My spouse makes over the amount allowed to contribute to a Roth IRA. However, I do not. Is it possible... Read Answer >>
  4. Earnings within a Roth IRA are tax free, so are these earnings included in the modified ...

    There are two possible answers to this question, depending on whether or not the distribution from the Roth IRA is qualified.Earnings ... Read Answer >>
  5. How can I fund A Roth IRA if my income is too high to make direct contributions?

    Roth IRAs are not available to you if you are a high income earner - unless you use the following strategy. Read Answer >>
  6. Is a Roth IRA the right choice for me?

    Is a person with Deferred Compensation also eligible to open a Roth IRA account?  Can a person begin the Roth IRA ... 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

    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.
  3. 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.
  4. Financial Advisors

    Why Some Advisors are Shy to Convert Roth IRAs

    Potential upcoming changes from the Obama Administration could hit rollovers from traditional to Roth IRAs, and that has advisors reluctant to convert.
  5. 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.
  6. Retirement

    Roth IRA Contribution Rules: The Basics

    What you need to know about Roth IRA contributions – from eligibility to dollar limits, deadlines to tax breaks.
  7. Taxes

    Roth IRA Vs. Traditional IRA

    Learn more about the differences between a Roth IRA and traditional IRA.
  8. Products and Investments

    Is the Roth IRA Under Threat?

    Roth IRAs are one of the most popular retirement savings accounts. Could Congress ever decide that too much money is being sheltered from taxation?
  9. Retirement

    6 Reasons Not to Recharacterize Your Roth IRA

    If you're thinking of recharacterizing your Roth IRA into a traditional IRA account, here are six compelling reasons why you should reconsider.
  10. 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.
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. Ordering Rules

    The order in which Roth IRA assets are distributed. Assets are ...
  4. Backdoor Roth IRA

    A method that taxpayers can use to place retirement savings in ...
  5. Qualified Distribution

    Distributions made from a Roth IRA that are tax and penalty free. ...
  6. Individual Retirement Account - IRA

    An investing tool used by individuals to earn and earmark funds ...
Trading Center