I rolled over a 401k from a former employer to my IRA in 2006. The 401k was a straight stock purchase plan, w/o any employer contribution. I had invested about $6000 in the plan, and when I did the rollover, the value of the 401k had gone down to around $4100 due to a drop in the company's stock price. Is there any way to take advantage of this loss when filing my 2006 taxes?
Thanks!
2007-02-18 12:59:46 · 5 answers · asked by jcvermont 1 in Business & Finance ➔ Taxes ➔ United States
No.
As the money was never taxed, losses are not able to be realized even if you cash it out.
2007-02-18 14:17:35 · answer #1 · answered by Wayne Z 7 · 1⤊ 0⤋
There is, but only when you reach retirement age, and then only to the extend that the value of the fund dropped below your contributions. Loss of the value of the employer contributions or any gain is not deductible. You must withdraw ALL remaining funds from the account to take the deduction. As far as I can tell, rollover distributions aren't eligible for the deduction.
2007-02-18 16:43:20 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
a tax deferred account inclusive of a 401k or an IRA enables you to defer taxation on the account stability (contribution plus earnings/loss) till the money is disbursed from the account. at that element the great volume being disbursed (not rolled over yet taken in funds) is taxed at modern-day fees. there's no differentiation between the contributions and the earnings....it quite is all seen earnings. That being suggested, there's a valid reason that it quite is quite useful to roll a inventory over in-sort into somebody IRA....you completely assume it to recover from the loss and don't % to incur further rate of merchandising and repurchasing the shares. as quickly as you're taking the money out of the pre-tax account and placed it into an after-tax account the shares get a clean foundation...the fee on the time of the distribution. So there's no actual thank you to do what you %.
2016-12-17 13:22:53 · answer #3 · answered by Anonymous · 0⤊ 0⤋
No, I don't believe there is. You can only take the loss when you actually SELL the stock, and then you use that to offset capital gains. Since you still hold the stock, it doesn't matter what the current price is.
2007-02-18 13:09:32 · answer #4 · answered by Bonnie G 4 · 0⤊ 0⤋
No, losses on a 401K are not deductible.
2007-02-18 15:15:03 · answer #5 · answered by Judy 7 · 0⤊ 0⤋