Let's say you lose 90% of the value of your 401k investment in the yea

[Guest Billy]

Let's say you lose 90% of the value of your 401k investment in the year 2000. Are these losses tax deductible?

[david rigby]

Generally, no. One of the primary purposes of a tax-qualified plan such as a pension plan, profit-sharing plan, 401(k) plan, etc. is that any amount of earnings inside the plan is tax-deferred. Amounts are not subject to taxation until they come out of the plan, that is, they are paid directly to a plan participant. Since earnings inside the plan do not have any immediate impact on taxable income, losses inside the plan are treated in the same manner.