I had a significant loss in my 401K funds, through no fault of my own, that I wasn't sure if I could claim some kind of loss for on my tax return.
Here are the details:
- I had $50K in my 401K from the employer I retired from, in a very low-risk fund. It was in a fund that never lost money, and barely made interest. It was no risk, but hardly any return.
- Apparently, my old employer was acquired by a different company, and they changed 401K providers.
- I was not notified this happened.
- I only discovered this randomly after one day I logged into my 401K account on the old 401K provider's website, and I saw my account was missing.
- After tracking down the company that acquired my old employer, they told me that they sent me a letter in September about this.
- They said the letter said I had to move my 401K balance into to a different fund to avoid what they called a "6-8% MVA ("Market Value Adjustment")" for them transferring my 401K from one provider to the new provider.
- They said that this 6-8% Market Value Adjustment occurred when the fund my 401K was in was sold from the old 401K provider's fund and then purchased into a fund from the new 401K provider.
- The problem is that I NEVER received this letter, thus, was NEVER aware that I needed to take an action to avoid this 6-8% Market Value Adjustment. I obviously would have acted immediately to avoid such a gigantic Market Value Adjustment.
- So, without my knowledge, my 401K was transferred to a different financial institution, and I lost nearly $4,000 because of this Market Value Adjustment.
Is there an way to recoup any of this loss through my federal and/or state tax filing?
Thank you.
