Harry Gross: Cashing the IRA was a big mistake

Dear Harry: I rolled over my company's pension plan to an IRA back in 1987. The value was then $7,700. I cashed it in in October for $19,450. That's a profit of about $12,000. I then invested the $19,450 and sold it for $15,000 in January. On last year's tax return, I reported the profit and paid the penalty as well as the tax. Since I lost $4,450 on the sale, can I now go back and file a new return for 2008 and use the loss to offset the profit and penalties?

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