Can capital gains from early distribution of Roth IRA (i realize no way to avoid 10% penalty) be offset by short term capital losses from non-IRA account realized by same individual in same tax year
Thanks
There are no capital gains in IRA distributions. Only ordinary income. Yes, it can be offset by capital losses, but no more than $3000 a year, and you would still pay the full 10% penalty on the whole amount.
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"and you would still pay the full 10% penalty on the whole amount" To clarify, the penalty is on the whole amount of the earnings. Not the whole amount of the distribution. – user102008 Aug 13 '16 at 18:18
