Cut the tax on mandatory IRA withdrawals — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Cut the tax on mandatory IRA withdrawals

by on
in Small Business Tax

Q: I have a carried-over capital loss of $6,500 from last year. Can I use this loss to offset some of my income from a required IRA distribution? S.B., Toms River, N.J.

A: Yes, within certain limits. A capital loss must first be used to offset any capital gains realized during the year. Then the loss can be used to offset up to $3,000 of ordinary income. Since your required distribution from the IRA is treated as ordinary income, you can use any excess loss to offset up to $3,000 of the distribution. You can still carry forward the extra $3,500 loss to next year. Tip: You can't use losses from investments inside the IRA to offset any capital gains or income.

Related Articles...

    No matches

Leave a Comment