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When selling a non-performing stock within an IRA (it has not been declared worthless), can the money that was lost be shown as a long term loss on Schedule D?

Samantha64
Level 3
 
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sjrcpa
Level 15

No. Gains and losses within an IRA have no income tax consequences to the IRA owner.


ex-AllStar

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3 Replies 3
sjrcpa
Level 15

No. Gains and losses within an IRA have no income tax consequences to the IRA owner.


ex-AllStar

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poolcleaner
Level 8

You get the benefit of the loss when you do not have to take that lost money out of your IRA.


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abctax55
Level 15

Susan & Jane are correct.  PLUS, unless you've made non-deductible contributions, you don't have any basis in the IRA anyway (translation, there isn't a tax loss).

Prior to 1.1.18 - if there was a tax loss (you've made non-deductible contributions OR it's Roth IRA), all similar accounts have to be closed to capture the loss.  Said loss was deductible as a miscellaneous itemized deduction, subject to the 2% haircut - pre TCJA.

I don't know off the top of my head if that 2% issue was changed by TCJA ( I vaguely remember it being discussed?) but if not, 2% miscellaneous deductions are gone.

And that *loss* never went on Schedule D.

Plus you've never been able to write off a loss that hasn't even occurred yet....non-performing stocks don't trigger deductible losses any more than ones doing really well trigger reportable gains.

(I wanna be a member of the pot stirring club too)
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