In June 2008 I put $4000 into a roth IRA in a very risky stock. The company is close to going bankrupt and the stock I have is worth a couple hundred dollars now. Can I cash out my IRA now and take the lose as a tax loss (for 2008 taxes or 2009 taxes), or is it to late? This was the first year I contributed anythihg to a retirement account.
Thanks

Zip Code: 40222

Joe-

While you can certainly cash out your account, you can't claim losses on your Roth IRA as a deductible item on your income tax return.

Zip Code: 11797

All the aricles Ive been looking at online have said that you could if you liquid all of your Roth IRA's. This is my only IRA and has been open for less than a year. IS it to late to liquidate it now and use it as a tax decustion for 2008? If so could I liquidate it and use it as a tax decudtion in 2009?
Thanks,

It's my understanding of the rules that if you liquidate your Roth IRA, and the value at that time is less than the money you contributed, you do get to claim a loss. You'll claim that loss as a Miscellaneous Itemized Deduction.

Remember, these deductions are only allowable to the extent they exceed 2% of your income, and if you itemize for that year.

If you haven't liquidated your Roth IRA yet, it's too late to claim that loss for 2008. Instead, you'll report that loss on your 2009 return.

Zip Code: 01801