As of 2018, it is no longer possible to deduct IRA losses from your income. The Tax Cuts and Jobs Act of 2018 eliminated this and many other miscellaneous itemized deductions.
Prior to 2018, if you had losses in your IRA with non-deductible contributions, you could cash out the entire IRA and deduct the loss on your Schedule A of your tax return. The deduction was limited to the amount greater than 2% of your Adjusted Gross Income. The loss had to be in excess of your basis, the non-deducted contributions to the account. Plus, the loss must be aggregated over all of your IRA accounts – because of the pro rata rule for distributions.
I realize that this is a pretty rare circumstance. But if you have losses in your IRA it used to be a consolation prize after you’ve had significant losses in your IRA.
Sorry to be the bearer of bad news.
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