Can I claim loss on 401K investments?
Posted by admin
Mallik K asked:
My wife and I participate in the company 401k plan and the plan allows us to invest company contributions as well as employee contributions; some of them lost money last year. Deductible under loss?
KERRY
My wife and I participate in the company 401k plan and the plan allows us to invest company contributions as well as employee contributions; some of them lost money last year. Deductible under loss?
KERRY
January 21st, 2009 at 9:06 am
EDMUND
There is no tax or tax loss while the assets are in the 401(k) account.
The only way you could ever take a loss is if total distributions paid out of the account until it is zero balance, exceed the total contributions. So you cannot even think about 401(k) losses until the money is ALL gone. And that would be a sad day indeed.
January 23rd, 2009 at 5:04 pm
JORDAN
No. No capital gain or loss.
January 25th, 2009 at 5:05 pm
MIGUEL
A 401k is like a separate person who doesn’t file tax returns, so it has neither taxable gains or losses. You, as taxable people never received the money, so you, as taxable people did not suffer the loss. The IRS is not going to let you duck taxes on the income while claiming the losses.
January 26th, 2009 at 3:34 pm
WADE
nope…all gains or losses in a 401k are unrealized to the individual. It’s only income to you when you take it out. And even then it’s ordinary income and not investment income.