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Hi Scott. Lane here.
What was the reason she was refunded the money. Over the earnings limit?
Also was this becasue of investment value difference? (or some sort of surrendr fee)?
If this is simply becasue the after tax investment was made at a value of 5500 and the redenption was done when the value was 4952, then yes, this is a capital loss.
But I think these ae imprtant questions.
IF tbis was for eligibility issues, she essentially never MADE a Roth contribution.