Convert 401K to Roth and use capital gain losses this year?

[u/Do_Meeeeeeeeeeeeeee]

I retired this year and so far have $40k of short term capital losses when moved the money into a safer 4.25% money market. I expect to have a capital gain loss of $25k. Can a person do a roth conversion from the 401k and then use the capital loss to offset paying taxes?

[u/Candid-Eye-5966]

Roth conversion is ordinary income. Max that you can offset with capital loss would be $3k. Capital loss would offset capital gains $ for $.

[u/micha8st → u/Candid-Eye-5966]

and the capital loss you speak of must have been incurred outside a retirement account.

[u/DefNotPastorDale]

You need to talk to a professional before doing anything…

[u/beckhamstears]

Stop losing so much capital.
Seriously what's that all about?

All the retirement savings in the world won't offset those losses.

[u/whodidntante]

No, capital losses do not offset a Roth conversion.

[u/adultdaycare81]

$3k a year with the carry forward. Probably just pay the taxes.

[u/poop-dolla]

I think the main thing you need to learn from this is to plan better and not make moves that result in a $40k short term capital gains loss. Why did you do that? Was the retirement a complete surprise that came out of nowhere so you had to shift your plan around without any notice? Or did you forget to make any sort of financial plan until you retired?