I moved some funds from my company 401k into a Brokerage account to buy some individual stocks.. If I sell some of them for a lose can I use that on my taxes this year?

[VolvoGirl]

Is the brokerage account still in the 401K?  Or did you take a 401K distribution?  Or roll it into a IRA Brokerage account?  

[DoninGA]

The withdrawal of funds from the 401(k) will be taxable on your 2023 tax return.

The investment you sold for a loss in 2023 will be reported on the 2023 tax return as a capital loss.

[tonyawad]

Yeah the Brokerage account is still attached to my company 401k and I haven’t retired yet.. 

[DoninGA · Accepted solution]

Since the brokerage is within the 401(k) then there was not a withdrawal or distribution.  Gain or losses from the sale of  stocks within the 401(k) are not reported on a tax return.

[VolvoGirl · Accepted solution]

So if it's all still in the 401K account then there is nothing to report on your tax return.  So you can't use the losses on your tax return.  You only pay tax when you take a withdrawal from the 401K.   That's is the benefit of using a 401K or IRA.  You don't report the buys and sells, gains or losses or anything that happens inside the account.  But then when you take a distribution you pay regular income tax and don't get the capital gains treatment on it.  

[tonyawad]

Thank you