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Write off loss on Roth IRA Investments

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in Small Business Tax

Q I have a Roth IRA that I opened a few years ago. After selling some stock losers, I’m showing a $2,500 loss overall. Can I deduct the loss if I close out the IRA? L.L.B., Berkeley, Calif.

A Possibly. For this purpose, your basis equals the amount of the contributions you’ve made to the Roth IRA. You generally can treat the difference between your basis and the amount you receive when you close out the Roth as a miscellaneous itemized deduction. To the extent that your total miscellaneous expenses exceed 2 percent of your adjusted gross income, you can deduct the amount on your tax return.

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