if you do decide to sell to take advantage of the loss there are several things to know. while your fund may have lost money ( it is worth less than your tax basis), capital gains and losses are netted. the maximum net capital loss that can be deducted on your 1040 in any one year is $3,000. should you sell some or all shares and realize a net loss and then repurchase the same fund or a substantially similar fund within 31 days you will be subject to the wash sale rules which will result in you not being able to deduct the losses on the original sale. if you sell only some shares and you have a dividend reinvestment program, those reinvested dividends can create wash sale losses.
