Loss on ROTH IRA in 2018
I have a client who has a loss in his ROTH IRA, he wants to liquidate the account, his only ROTH account, can he receive a tax benefit from the loss in 2018 since miscellaneous itemized deductions no longer exist under new law
Permalink Submitted by David Mertz on Fri, 2018-06-01 17:23
No. The elimination of miscellaneous deductions eliminates any opportunity to recognize unrecoverable basis. The client will continue to have the unrecovered basis should the client ever have an opportunity to apply it to a Roth IRA distribution in the future (assuming some subsequent Roth IRA contribution and investment growth). Once the client is eligible for qualified Roth IRA distributions there is no need to track Roth IRA contribution or conversion basis (unless the law changes in the future to reinstate the miscellaneous deduction).