Originally Posted by nottelybill
when I take my distribution from my traditional IRA if I transfer stock that has a lost can I then take the lost when I sell it in my regular account?
You can't deduct losses from stock investments tied to a 401(k) from capital gains earned on regular stock investments. The 401(k) earnings are not figured into any tax situation until you receive a distribution. Therefore, you can only deduct losses from regular stock investment trades from your income and from capital gains. You also can claim only stock losses if you sold the stock during the tax year in question. While you cannot deduct 401(k) stock losses from capital gains, you can soften the blow of a 401(k) distribution by deducting any regular stock losses on stocks sold for a loss in the same year that you received a distribution ; you may deduct your Traditional IRA investment losses only if the total balance that you withdraw is less than the basis amounts in your Traditional IRA. The deductibility of any loss depends on its tax basis and if you itemize your deductions. The loss is deducted against your income and is not subject to the capital loss deduction limitation of $3k per year.