Capital Gains on early distribution from Roth IRA

Question

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

Answer 1

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.