The 401k does not participate in tax gains or losses until you start to withdraw the money at retirement. So the answer is that you cannot use the loss in this years tax forms. Note also that you do not actually have a gain or loss until you sell.

Losses are not tax deductable (see link) http://www.the-retirement-guide.com/401ktaxdeducti on.html

I am facing the same situation and ask the same question...so far I have found the answer is no...we can not claim the loss. See the infromation on the following link. http://www.the-retirement-guide.com/401ktaxdeducti on.html

My husbands 401K lost 1/2 in market value this year so we rolled to an IRa due to his age of 62. Is their any tax deduction for the loss?

Hello, I found this article in the Wall Street Journal posted on the web November 8, 2008. It will answer all of your questions. Losses in 401(k)s Usually Aren't Tax-Deductible
Here is the link http://www.filife.com/stories/losses-in-401ks-usua lly-arent-taxdeductible