My wife rolled over her 401K more than a year ago into a IRA. I am not sure if it is a roth or what. She invested in the fidelity 2040 fund, and if anyone is familiar with that fund, you know it lost like 20 or 30 percent. Will I be able to write those looses off? Thanks.
Can I write off the losses my wife incurred on her IRA? This was a rollover from a previous 401K?
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Apr
src50
April 29, 2010 at 7:44 am
No.
Alayshia B
April 29, 2010 at 8:30 am
KEEP THE ONES THAT U LOST IT DEPENDS ON THE IRS QUESTION
bostonianinmo
April 29, 2010 at 8:34 am
No, you cannot write off losses on an tax deferred retirement account. The money going in was never taxed in the first place.
Charles G
April 29, 2010 at 9:34 am
One of the tradeoffs in passing the 401(k) and IRA legislation (which is one of the few “good deals” for individual tax payers), is that losses could not be claimed.
So no.
Some advisers state that it is best to hold the “bond” portion of your investments in tax deferred accounts, and the “stock” portion in taxable accounts, just for this reason. This causes other problems, (is it worth it for a $3,000 deduction per year?) but is worth considering.
v b
April 29, 2010 at 10:24 am
The tax benefit on the loss is that she’s taxed only on the money she takes out, not the money that she had that evaporated.
In the unlikely event that this is a Roth (meaning she paid taxes when she rolled the money over), then she has basis, but you only recognize the loss when you finally close all of her Roth accounts (it could recover in the meantime) and even then it’s a lousy schedule A deduction.
laytonbensingerjr
April 29, 2010 at 11:10 am
No /reason the Government looks at it as an agreement through the company you work for.When the time comes to collect only then you will be Tax.
Jss
April 29, 2010 at 11:16 am
IRA or 401K loss is not deductible as this is the money on which you never paid income tax.
Read http://taxipay.blogspot.com/2008/04/list-of-articles.html