I have some money in a CD that's in a Roth IRA account. I'd like to transfer it out of that account and into another one, as part of a roll over. The CD is not at maturity, so I will need to pay a termination fee. What are the tax implications of me paying money to terminate the CD?

  • Can you pay the fee out of the CD balance? – quid May 13 '16 at 20:27
  • 3
    You cannot pay cash money to your IRA custodian to terminate the CD early; the early termination fee merely reduces the amount that gets rolled over into your new IRA account. If and when in the far-distant future, you have withdrawn all the money from all of your Roth IRA accounts, and it turns out that the total amount withdrawn is less than the total amount contributed or rolled over into your Roth IRA, then the net loss can be deducted as a Miscellaneous Deduction on Schedule A, subject of course to the 2% floor for Miscellaneous Deductions (i.e. no deduction for most folks.) – Dilip Sarwate May 13 '16 at 20:44

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