If you’re considering a speculative investment, do it outside of your IRA. On the outside, any losses can result in a tax deduction. Inside your IRA, that’s not always the case.
Investment losses inside an IRA are not deductible.
* The only way to get a deduction for losses in a traditional IRA is to cash out all of your traditional IRAs. The resulting proceeds must be less than your total contributions.
* The only way to get a deduction for losses in a Roth IRA is to cash out all of your Roth IRAs. The resulting proceeds must be less than your total contributions.
Moreover, a loss resulting from cashing out all of your traditional or Roth IRAs is deductible only as a miscellaneous itemized deduction. That mean’s you’ll get a deduction only to the extent the total of such deductions for the year exceeds 2 percent of your adjusted gross income.