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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

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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.

  • "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

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