Tax Law (Questions About Taxes)/net capital loss

Advertisement


Question
Can a person deduct a net capital loss (up to the $3000/year limit) from income from traditional IRA distributions?   In other words I don't have any earned income just pension, traditional IRA and social security and i didn't know if the net capital loss can only be taken off earned income

Answer
no.. that is the deal with IRA...  you get to avoid cap gain and income until withdrawl, but you dont get to realize cap losses...

few special rules on stuff like employer stock held (Net unrealized appreciation) could get you to at least even basis not loss.. which would help.  but that only applies if you held employer stock in your 401k

also, in year of contribution, you can "undo" a contribution if losses are beyond your original deposit..  

but, generally, no  

Tax Law (Questions About Taxes)

All Answers


Answers by Expert:


Ask Experts

Volunteer


MEdusa

Expertise

Tax and general business including hospitality related (hotel mgmt degree and experience in industry prior to obtaining ms tax and cpa).

Experience

19 years cpa. ms tax. NOTE: My discussions are only a general information and do not constitute tax advise without entering into a specific agreement and executing an engagement letter; This free chat is nothing more than general information and should not be construed as tax advice nor does my response or replies imply an agreement to provide client specific advice or other guidance for purposes of avoiding IRS tax or penalties and should not be relied upon without your own validation and confirmation of the how the discussion may fit your facts... Not having all the facts and/or not having a direct client relationship prevents me from providing the most accurate replies as possible and I highly suggest using a local CPA to provide you with written advice and guidance. Taking matters into your own hands is much akin to trying to land an airplane without a license. It is easy to FLY a plane, but LANDING is when critical experience is key. In short, caveat emptor; do your homework and don't just rely on free chat board advice anywhere, anytime.

Organizations
AICPA, CSCPA (Ct society), National Tax,

Publications
a bunch.

Education/Credentials
MS tax and other post graduate coursework

Awards and Honors
variety including Summa Cum Laude

Past/Present Clients
I don't disclose or kiss and tell

©2016 About.com. All rights reserved.