The losses are deductible as miscellenous itemized deduction, subject to the 2% of your Adjusted Gross Income limit.
1. Personal tab
2. Deductions & Credits
3. Scroll down to Other Deductions and Credits
4. Select Other Deductible Expense - enter description and amount
Per IRS Pub 970 (page 61): "If you have a loss on your investment in a QTP(Qualified Tuition Plan) account,
you may be able to claim the loss on your income tax return.
You can claim the loss only when all amounts from
that account have been distributed and the total distributions
are less than your unrecovered basis. Your basis is
the total amount of contributions to that QTP account. You
claim the loss as a miscellaneous itemized deduction on
Schedule A (Form 1040), line 23 (Schedule A (Form
1040NR), line 9), subject to the 2%-of-adjusted-gross-income
limit."
