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I have a bankruptcy loss in a IRA, the IRA still has another

stock, can I claim the...
I have a bankruptcy loss in a IRA, the IRA still has another stock, can I claim the loss in the year that occurred and how?
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: It was a partial rollover from a 401k and received a Realized gain/loss from the custodian showing the basis and the amount of the realized loss in 2016. I assume is a traditional IRA. The IRA still has a balance. Can I claim the loss due to a bankruptcy in 2016?
JA: Is there anything else the Accountant should be aware of?
Customer: I don't believe
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Answered in 8 minutes by:
7/13/2017
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,964
Experience: 15years with H & R Block. Divisional leader, Instructor
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Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

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The only way you can claim a loss based on an IRA is when you made contributions that were not allowed to be deducted (that is IRA BASIS) and you take all the funds out of all IRAs that you have. IF the amount you take out is less than those contributions that were already taxed then you have a loss.

There is no loss for tax purposes unless you empty all IRAs and you get less than you already paid tax on.

401K rollovers were not taxed so that amount does not mean a loss. It is just the contributions you made that you did not get to deduct. You should have a form 8606 for any year that happened.

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Customer reply replied 5 months ago
The amount that was rollovered, 80%+/- was invested in a stock that the company went bankrupt and the whole investment in that stock is being reported by the Custodian as a Realized loss in 2016, are you saying none it can be claimed as a loss?

Not unless you had made contributions and never were able to deduct.

Unfortunately, the loss of the holding in the IRA is not a loss for taxes because you never paid tax on the amounts that were used to invest.

I sincerely ***** ***** could tell you differently but the only way is as I explained.

Please let me know if you need more information.
If not then scroll up to see the STARS to rate so I am credited.

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Please post below so I know you have read and understand my response.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,964
Experience: 15years with H & R Block. Divisional leader, Instructor
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