I closed my 529 account. Can I deduct losses from my 529 savings plan? If yes, how do I do that on TurboTax?

[MargaretL]

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."

[graceavery333]

Im still not sure what a QTP is either..
  Can someone please help me with a direct deposit date? Turbo Tax excepted my taxes January 19th and gave me a ddd no later than February 9th. I check the irs sight every day. All it says is Still Processing.
  I cant reach anyone at the irs, ive ordered my transcripts. Can someone please help me?

[graceavery333]

I dont know what a 529 account is.

[barrettlboehm]

Hi, is this guidance applicable for 2020 tax season?  With the market drop, we're wondering if there is anyway to deduct current losses in our 529 plan, which we just started last year.

Thank you,

[VictoriaD75]

No. Current losses will only be available for the current tax year. You will not be able to deduct losses until you file your taxes for 2020. Additionally, if you do not sell or close out your account, you do not have realized losses and will not be able to deduct. Losses in market value are not deductible until realized by sale.

[barrettlboehm]

Sorry, I meant for the current year, 2019 (next years filing season).  So itemizing a 529 plan loss is still an option?  I ask specifically in the context of the 2017 tax legislation slashing itemized deduction options.  Thank you!

[Hal_Al]

Despite the June 3, 2019 date*, on the original post, that answer only apples to  2017 and earlier returns.

All  miscellaneous itemized deduction, subject to the 2% of your Adjusted Gross Income limit, were eliminated starting in 2018. 

Losses in a 529 plan are not deductible, at all.

*The date is when old answers were transferred to the new discussion forum.