401k losses

[robin111]

Can losses to a 401k fall under the category certain losses-losses from activities entered into for profit? The amount in the account at the beginning of the year clearly shows it's worth and the ending balance clearly shows it's losses as do the detailed statements. This is not just theroretical, it is an actuality. I cannot get the amount my balance said I had at the beginning of 2008 and will never recoup the loss as the compounding interest won't be the same if and when the market turns around and the value goes up. Plus, my employer has now ceased to match contributions to the plan. Would I have to close the account and reinvest it into another retirement account to claim the loss to show the differnce in value as an "actuality"?

[davew128]

Except in the almost certainly unlikely event you made non-deductible contributions to a 401(k), you can never ever ever ever ever deduct a loss with a 401(k) even if you liquidate it.

[efflandt]

Your 401k contributions have never been taxed. Therefore even if you lose it all, there is no tax deduction for losses.

Similarly for an IRA the only way you can ever take a tax deduction is if your total distributions are less than total "nondeductible" contributions (when all the money has been withdrawn, not transferred).

Either way there is no loss deduction for contributions that were deductible or never taxed.