Loss On Roth IRA

Yes. IIRC this is mentioned in Pub 590, but they have a nasty habit of hiding things in that Pub. Try the section on required distributions in Chapter 1.

See item 9.12 on page 6 of this custodial agreement:

Nada on holding period. I just know it has to be the date of distribution as an earlier date makes no sense. I'm just looking for some form of guidance other than a post at fairmark.com on in-kind distributions.

Right. It was the closest I found, and makes sense that the date for valuation is also used as acquisition date. Sure, there are exceptions to this rule, such as inherited property, but such an exception would probably be well known if true.

I've actually dug into the Code on inherited property, and contrary to what one might think, the holding period begins when the legatee takes title. The reason any gain if it's sold in the first year of holding is that the holding period is ignored when determining whether a cap gain is treated as short- or long-term when the property was inherited.

As I recall we looked into this during the discussion of the "super long term" gains that were in the law for a while but never actually had application on returns.

Distribution date - because a taxpayer and his IRA are separate tax entities.

Of course they are close enough for wash sale purposes.

The recent IRS ruling on wash sales that dealt with retirement accounts involves taking a loss in your taxable investments and buying substantially equivalent securities in your retirement account +/- 30 days from the sale.

I know it has to be the distribution date... I was just hoping that there was some guidance floating around.

As to they being different tax entities, they are related parties. One might argue that moving the shares from one related party to another related party is nothing more than a refinement of title. The IRS used that logic in RR 08-05, where they deny a loss under the wash sale rule when you buy the same securities within +/- 30 days in your retirement account after taking a loss in your taxable account.

I think the argument is that the shares inside a tax deferred retirement account have no holding period. As such, there is no holding period to transfer to the shares now residing in the taxable account.

I think I'll put this under another thread. I've never heard of inherited property (under current law) being treated as anything but long term--so why would a holding period even be assigned? Our software for the 1041 and for the 1040 automatically enters LT for such assets and fills in the date of purchase as "inherited."

Relevant code sections are 691, 1014, 2032, 2032A (for basis of inherited properties).

If the code is left alone, we will have those "super long term" gains, if you were referring to the 18% rate for assets held 5 years.

If the basis is determined at the date of the distribution, I would think the holding period would run from that date as well.

So, does the denial of the wash sale loss then create a basis in the IRA, so that when the funds are eventually withdrawn, some proportion will not be taxed? Shouldn't this be similar to making post-tax contributions to the IRA account? Would one have to file a form 8606, then?

With a wash sale, the loss isn't denied, but merely suspended (and added to the basis of the re-purchased shares). If this same logic applies to a purchase inside an IRA, it would seem that it would create basis in the IRA, then, wouldn't it? [OK, we all know that logic and fairness isn't expected, but what about this case?]

Also, just as a point of curiosity, how did the IRS even find out about the purchase in the retirement account? That isn't information that is reported.

No. Creating a wash sale via acivity in an IRA does not create basis in the IRA.

Sorry, no.

Sale at a loss to a related party also disallows a loss, with no relief available.

How does the IRS even find about purchase of a security in a regular brokerage account?

I am discussing what the law says, and not playing audit lottery.

See there? You answered your own question. As I mentioned before, that's the context in which we discussed a holding period for inherited assets. Otherwise I can't think of any reason for caring.