Rollover IRA - Investment Tanked

I have a rollover IRA that I invested in a single stock (stupid). The company that I had invested in is bankrupt, and their assets have been acquired by another company (i.e., the investment is a total loss).

What do I need to do so that I can use this investment as a loss when I start withdrawing monies from my IRA accounts?

State: California

If you have a loss on your traditional IRA investment, you can recognize the loss on your income tax return, but only when all the amounts in all your traditional IRA accounts have been distributed to you and the total distributions are less than your unrecovered basis, if any. Your basis is the total amount of the nondeductible contributions in your traditional IRAs. You claim the loss as a miscellaneous itemized deduction.

A similar rule applies to Roth IRAs. The rule applies separately to each kind of IRA. Thus, to report a loss in a Roth IRA, all the Roth IRAs (but not traditional IRAs) owned by you have to be liquidated, and to report a loss in a traditional IRA, all the traditional IRAs (but not Roth IRAs) owned by you have to be liquidated.

Thanks - and 1 follow-up

Are there any limitations as to when I have to sell the stock to actually recognize the loss in the IRA account?

The company is no longer an ongoing concern, so I have not done anything with the stock.

Thanks again.

As I said above, you can take a loss only when All the amounts in all your traditional IRA accounts have been distributed to you and the total distributions are less than your unrecovered basis. Therefore, so long as the stock is sold or valueless at the time you withdraw all the funds in the IRA, you could then take the loss deduction. However, there will be no loss unless you have a net loss from the IRA at the time you withdraw all the funds.