I took out $8,000 in hardship withdrawals from my 401k in '08 and underestimated my tax burden.?
Can I claim a realized loss on my taxes since the sale price when I liquidated the stocks was less than the purchase price I paid when I bought the stocks to market volatility? And how would I go about claiming this loss?
Comments
Nope, sorry. The distribution is taxed as ordinary income. You may or may not be able to dodge the 10% penalty tax based upon the hardship. There is never a deduction for losses in a tax-deferred retirement account. You didn’t pay tax on the money going in, so the "basis" in it is zero already.
August 16th, 2010 at 7:55 pm
Loss is not deductible.
Read about Trad IRA
http://taxipay.blogspot.com/2008/05/traditional-ira-and-roth-ira.html