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Typically, the only ways to reduce tax liability are to have business losses, itemized deductions, and various tax credits.
You cannot write off the decrease in the value of the portfolio.
That is correct, unfortunately. Had the loss taken place in the traditional account and then you did a conversion it would be based on the lower amount.
You can write off the loss, only if you close out the Roth IRA account.
IF you close it, you can take a deduction equal to the difference between your basis in the account and its value when you close it down
But, if you don't want to close the account, you can't deduct the loss from year to year.
But, this would not offset the 2010 tax bill - it would impact you in the year of the account closure.
You can read about this option, HERE
You could open another in a later year
Yes, you could do that.
All of your Roths though must be closed - even if you have a second roth that has a profit.
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