Ira Loss On Excess Removed

[Kram BergGold]

My client lost $400 when she removed her excess contribution (she rmoved the entire 2007 amount, contributed in Dec 2007). If the $400 were ia positive amount, it would show up on a 1099R and I would add it to her 2007 income. Is there anything I can do with the loss?

[Brian EA]

My client lost $400 when she removed her excess contribution (she rmoved the entire 2007 amount, contributed in Dec 2007). If the $400 were ia positive amount, it would show up on a 1099R and I would add it to her 2007 income. Is there anything I can do with the loss?

I am almost sure you can claim it on sch A subject to the 2% deduction

brian

[Bees Knees]

Losses on IRAs are only deductible when all of the taxpayer's IRAs are cashed in. (TTB p. 4-26) If income on an excess contribution is a negative (a loss instead of a gain), all it means is you don't need to take out as much to correct the excess.

Example: Excess contribution = $400. IRA lost $100 in the time between the excess contribution and the withdrawal. Amount that must be withdrawn to correct the excess contribution = $300. (TTB p. 13-11 worksheet)