I have two Roth IRAs, one of which has a balance that is much less than the total contributions I have made to the account. Can I write off the losses for that account?

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

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