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I was under the impression I could claim the capital loss if I liquidated "all" my Roth IRA's (which I did - all one of them), but TurboTax is comparing the Box 1 amount to my total contributions and basically adding $0 of income to my 1040.

Capital loss under this circumstance can indeed be claimed, but might end up not being of benefit.

From IRS Publication 590 <>, page 62 of the tax year 2003 edition:

Recognizing Losses on Investments

If you have a loss on your Roth IRA investment, you can recognize the loss on your income tax return, but only when all the amounts in all of your Roth IRA accounts have been distributed to you and the total distributions are less than your unrecovered basis. Your basis is the total amount of contributions in your Roth IRAs. You claim the loss as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions on Schedule A, Form 1040.

That 2% AGI floor on Schedule A (Itemized Deductions) is usually a pretty high hurdle but it might be possible if you have lots of investment expenses, unreimbursed employee expenses, tax preparation expenses for that section of Schedule A. And even then the resulting total of your itemized deductions have to exceed your standard deduction to be of any benefit.
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