Can I balance off a stock loss sale this year against taxes due on a conventional IRA sale?
Tax rightoffs?
Nov 20, 2007
3 Replies
Stock losses are first offset against gains, if you still have a net loss, up to $3K may be taken against ordinary income.
A sale within an IRA is not a taxable event. An IRA withdrawal is considered ordinary income as far as tax rates are concerned. Are you over 59-1/2? Why not just take that stock loss against regular 'earned' income? If you don't need the IRA money and are already in a low bracket, consider converting it to a Roth IRA.
JOE
formatting link
Ok, up to $3K of capital losses will offset your income, more than $3K will carry forward to next year.
To the regulars here, I know I sound like a broken record when I say, if you are in a low tax bracket (see
formatting link
for 2007 rates) you might still consider converting some to Roth, depending on your situation. I do this for an older client (80 next month) to 'top off' her 15% bracket each year. This mitigates the rising RMDs and helps to reduce the risk she will be forced into the 25% bracket. Also - if she has a year with an unplanned high expense, we have the choice to withdraw from Roth, and again, stay clear of 25% land.JOE
Join the Discussion
Have something to add? Share your thoughts — no account required.
Didn't find your answer?
Ask the community — no account required