Grantor Letter for Wind Down Trust

Forum|Forum|11 months ago
April 4, 2025
1 reply
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If this is a security that was included in an IRA, is it still deductible.

DianeW777

No. For any income received as a distribution from your IRA, then it would be income. However, any money still remaining in the IRA is not included in your tax return until and unless you receive distribution.

If you made tax free contributions to a traditional IRA you would not have paid tax on the money placed in the IRA which means there is no loss to be used on your tax return. No earnings would be taxed until a distribution occurred which means there is no tax reporting until a distribution is received by you. When that occurs, and if you had any nondeductible contributions to a traditional IRA, it would reduce taxable income at that time.

Please update here if you have additional questions and we will help.

@srichard56

[Edited: 04/06/2025 | 12:34 PM PST]

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srichard56Author

Employee

Our advisor placed money ($70,000) from a 401-K into the L Bonds in an IRA account when we retired. Within (< 6) months of doing this we received notification of the GWG bankruptcy. Any earnings from these bonds would have been minimal. But now we have essentially lost the $70k unless something significant happens which is doubtful. So, it is a significant loss for us. But you are still telling me that I still cannot include the loss amount from the GWG Grantor Letter for the Wind Down Trust in my 2024 Federal Taxes, correct?