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Through some unfortunate investing decisions I took a rollover IRA I have from about 25K down to 5K this past year. I hadn't had much in gains when it was at 25K so I believe I contributed about 22K and had 3K in gains before suffering the losses.

My question, can I close this IRA out and declare a tax loss on my return? I'd rather take the 17K in losses to offset any gains I have in the future, or for the 3K per year you can take against income.

Would they first penalize me 10 percent for early withdrawal?
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