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Can I file a loss on silver in my Ira when I take it out?.

Can I file a...

Can I file a loss on silver in my Ira when I take it out?. Was purchased at a much higher cost than the current value.

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

We purchased the silver and put it in an IRA several years ago. We now plan on taking it out. The purchase cost was double the value of what it is now. Can we claim a loss on our taxes?

Accountant's Assistant: Is there anything else the Accountant should be aware of?

No, that's it.

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3/22/2018
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 17,610
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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Basis in an IRA is different than Basis of assets (like stocks). You need to know that first.

If you contribute to an IRA you are generally allowed to deduct the contribution on your tax return. Sometimes you cannot. The choice then is to take back the contribution or leave it in. If you leave it that means you have an amount in the IRA that was taxed because you did not get to deduct from income. That amount is BASIS.

If you have basis in the IRA and you take out all moneys from the IRA and you get less than your BASIS then you can claim the loss.

Other than that no, you cannot claim losses within your IRA.

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

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Customer reply replied 1 month ago
please let me understand. We paid cash for the silver with funds that obviously we paid taxes on. It was not from a contribution that would have been tax free. So since we paid taxes on that money . We never deducted the contribution. So, since we paid cash we can claim the loss?
Customer reply replied 1 month ago
No thank you on the call. If you can just answer the last question I will understand. Ty

Why were you not allowed the deduction of the contribution? You should have a form 8606 for the year of the contribution.

Any call offer is site generated, just ignore it.

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Customer reply replied 1 month ago
I guess we just didn't know what we were doing. We bought it direct from the mint with money we had, then rolled it over into the IRA
Customer reply replied 1 month ago
I don't believe we ever received any 8606 form but I can find out for sure.

You rolled it over.......................rollovers only happen when you move money or assets from one tax deferred account to another.

You would need the 8606 forms for proof that you had basis. Those are filed with your tax return. Look back to the older tax returns

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Customer reply replied 1 month ago
I guess I used the wrong term. We purchased it directly from the mint and we had to either take possession of it personally or set up an IRA account. Is that still considered a rollover?

Your IRA owned the silver it appears as you had to set up an IRA.

You still need to show that you did not receive a deduction on your return for that specific year.

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Customer reply replied 1 month ago
It was not in a tax deferred account until we set up the new IRA. We paid taxes on the money used to purchase it. It came from our savings account
Customer reply replied 1 month ago
I can assure you we did not receive a deduction

I understand that part but as I said in the year the contribution was made to the IRA you get to deduct.....

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Then whoever did your return that year should have filed a form 8606.

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Customer reply replied 1 month ago
Well, since we have a fool as an accountant, namely me, who always does our taxes, I would not have even known to claim the deduction. Lol The silver was purchased years ago.

Then copies of the returns so you can file the 8606 now (even late) to establish that basis

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The loss if claimed is not on Schedule D. The loss can be claimed only as a miscellaneous itemized deduction subject to the 2% of adjusted gross income limitation. Only miscellaneous itemized deductions that exceed 2% of AGI can be deducted.

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Customer reply replied 1 month ago
Ok, since we have already filed for this year, I can do it next year? Can I claim the entire cost of the silver? Can we still take it out? Can we claim a loss? Guess I better let a pro do it next year

You must take all out of the IRA to claim a loss. That means all the Traditional IRAs owned must be drained.

You claim yuou loss in the year you do that not for the value in the silver while it is still in the IRA.

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Customer reply replied 1 month ago
One last question. What if we have sell the silver, then roll it over to another IRA? Can the loss be claimed next year?

No. You must drain all the IRAs you own to claim a loss on an IRA Basis.

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Customer reply replied 1 month ago
Sorry, didn't see your above post. So we need to liquidate that IRA and take possession of the funds, then next year we can claim a loss?

That is the procedure

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Customer reply replied 1 month ago
Thank you very much

You are most welcome.
A positive 5 star rating is appreciated so I am credited for assisting.

Robin D.
Robin D., Senior Tax Advisor 4
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