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My Wife lost job, was 64 and took a large cash distribution from her Trad IRA. We have 8K in ST Losses carryover and 41K in LT losses carryover. It appears that the IRA distribution is seen as ordinary income so I should be able to apply some part of these losses against it to reduce AGI.
How do I do this.
You report the carryover losses on your schedule D. ST goes on line 6, LT goes on line 14. You can only use up to $3000 every year of the investment losses to offset ordinary income, the rest will carry over to the next year.
