529 Plan Guide
May 11th, 2008
Question: How to report negative earnings from 1099-Q?
I made a complete trustee-to-trustee transfer or a rollover from one 529 account to another last year (2010). However, there were negative earnings from the original 529 Plan.
Because there was a direct rollover, I do not owe any taxes or penalties for the distribution. But do I get any credit for the loss in the value (negative earnings)?
Many thanks for answering this. I just could not find anything on the web on how to treat this. H&R Block and TurboTax are useless – they do not guide through this form at all.
Answer: You don’t.
If you finally cash out every single 529 Plan and STILL have a loss, then in that year only you claim the loss as a 2% deduction on schedule A.
This is from pub 970.
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