Roth Distribution Loss-Sched D or Misc?

[Beth]

Client took a Roth distribution (held 5 plus years and was a total distribution) to buy first home. Total distribution amount was less than the basis.

Should that loss show up on schedule D or as a Misc deduction subject to the 2%?


Thanks!

Beth

[solomon]

Misc

Sch A 2% and it is added back to AMT.

[Brad Imsdahl]

TTB, page 4-23 lists losses on traditional IRAs or Roth IRAs as miscellaneous itemized deductions on Schedule A, subject to the 2% AGI limitation. Page 4-26 explains that the entire balance of all traditional IRAs, or the entire balance of all Roth IRAs held by the participant must be liquidated before any loss is allowed. In other words, if the participant has any other Roth IRA besides this one that was completely distributed, the loss would not be allowed.