My son started two Roth IRAs in 2007 and cashed them in in 2008. Since these are Roths does he have to pay tax and a penalty on them? They were both losing money and the investment advisor told him he could take the principle out at any time.
Roth IRA
Feb 02, 2009
1 Replies
Technically, there is only one Roth, and 2 accounts. He can take a loss if he liquidates all of his Roth accounts and has a loss, but the loss is subject to the 2% of AGI limitation (you can only deduct the amount above 2% of your adjusted gross income) and the deduction is only available if you itemize, and the deduction is not allowed under AMT. If he converted a traditional IRA to a Roth, he can convert back to a traditional IRA (and back to a Roth later).
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