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Tax Information With a Mother's Touch

Published by Eva Rosenberg, EA, aka TaxMama
Volume 2, Issue 91 December 15, 2000

IRA Loss Lost

From Washington State ...

Dear TaxMama,

I withdrew $20,000 (netted $16,000 after the typical 20% federal taxes) early from my IRA. I know all about the 10% penalty that I am facing.

My question is: my basis in the IRA was $27,000; when I made the withdrawal, it had decreased by $7,000 (I had it in precious metals). Do I get to claim the loss somewhere?

Karrie
Hi Karrie,

Did you take a deduction for the IRA when you made the deposits?

If you deducted the IRA contributions, not a chance.

However, if this was a non-deductible IRA, then you do, indeed have a basis. I don't know of a provision for taking a loss anywhere, but you certainly won't have to pay any taxes or penalties.

Best wishes,
Eva Rosenberg