cientax Posted February 19, 2009 Report Share Posted February 19, 2009 are losses in an employer retirement plan such as 401(k) deductible to the employee participant if the employer matches contributions? If they are how would they be treated on the tax return? Have a client coming in saturday and asked this question yesterday. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted February 19, 2009 Report Share Posted February 19, 2009 No, losses in a 401K are treated just like gains in a 401K, not taxable or deductible. Only way to take a loss is if the t/p cashes out his entire 401K, and actually ends up with a 'real' loss, not just a drop in value. IE if he put in $40K over the years, and at 1/1/08 it was worth $150K and now it is worth only $75K, he feels like he lost $75K, but in fact, he's still got an untaxed gain of $35K in there. Quote Link to comment Share on other sites More sharing options...
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