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Can I deduct loss of 401(k) stock on my income tax returns?

January 14, 2004

Date:  Tue, 16 Dec 2003
From:  Anonymous

I lost all my Kmart stock in a 401k plan. Am I entitled to deduct this as a loss on my taxes?

Answer

Date:  Wed, 7 Jan 2004

Hello,

Since you did not report income relating to the amount put in the 401(k) plan, you have no basis in the stock and can't claim a loss for the stock.

Good luck!
Mike Gray

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