Can you deduct the losses on your return for losses incurred for distr

[Guest J. BEARB]

:confused:

[Guest b2kates]

If you mean voluntary, after tax contributions. It is my understanding that losses there would be deductible since you have tax basis in the contribution and you would have received less than what you put in. However, if there are other funds you only get to offset by the amount of your basis.

For example

voluntary 2000

company contrib 4000

account loses 1000

distribtution is 5000

taxable would be 3000

5000 minus 2000

proper reporting on the 1099 is imperative

Brett

[Kirk Maldonado]

You don't get a loss at the time of the distribution (unless the securities are worthless); you only get a loss deduction at the time you sell the securities.

[Guest b2kates]

Kirk,

I understood the question to be a cash distribution. I agree if it is a stock distribution you do not recognize the loss until the securities are sold.

[Guest Jacque Jenkins]

I have a different question along the same vein.

I have a plan which failed the ACP test. All of the refunds are coming from voluntary after-tax $$ only. All but one of the HCEs experienced losses on the amount that has to be distributed.

Here's an example:

refund amount: $1,000

distribution : 900

The distribution was processed before 3/15 (calendar year plan). Does the HCE get to declare the $100 loss and if so, for what year, 2001 or 2002?