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Deducting a Tax Loss in a 529 Plan

Question:
Can a parent take a tax loss deduction on his son’s college 529 plan?

Reply:
At tidbit from www.savingforcollege.com: If you have a loss on your investment in a 529 plan account, you can take the loss on your income tax return BUT only when all amounts from the account have been distributed and the total distributions are less than your unrecovered basis (contributions into the plan). You claim the loss as a miscellaneous itemized deduction on Line 22 of Schedule A. It is subject to the 2% of adjusted gross income limit.

Tere D'Amato, CLU, ChFC
Commonwealth Financial Network

 
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