The physical characteristics of dust formed in supernovae is poorly known. In this paper, we investigate the extinction properties of dust formed in the type IIn SN 2005ip. The observed light curves of SN 2005ip all exhibit a sudden drop around 50 days after discovery. This has been attributed to dust formation in the dense circumstellar medium. We modeled the intrinsic light curves in six optical bands, adopting a theoretical model for the luminosity evolution of supernovae interacting with their circumstellar material. From the difference between the observed and intrinsic light curves, we calculated extinction curves as a function of time. The total-to-selective extinction ratio, $R_V$, was determined from the extinction in the B and V bands. The resulting extinction, $A_V$, increases monotonically up to about 1 mag, 150 days after discovery. The inferred $R_V$ value also increases slightly with time, but appears constant in the range 4.5--8, beyond 100 days after discovery. The analysis confirms that dust is likely formed in SN 2005ip, starting about two months after explosion. The high value of $R_V$, that is, gray dust, suggests dust properties different from of the Milky Way. While this result hinges on the assumed theoretical intrinsic light curve evolution, it is encouraging that the fitted light curves are as expected for standard ejecta and circumstellar medium density structures.
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