<prompt> Human: I recently made a terrible investment with pretty much all my savings 19k in a penny stock and was gambling on the company getting bought out. I bought at .13 and the company implemented a 350:1 reverse split making my shares worth 45.5. Well the stock then plummeted to 1 so Ive lost my entire savings. I was expected a new job to happen soon with a large raise that would offset anything I lost so I didnt care if I lost it all or not, was just a high risk gamble. But now that job isnt guaranteed anymore, in fact I will have to pay 3k just to take a test to qualify for the job. I currently have an IRA account with about 7500 and a 401k account with 23k in them. So this is a 2-part question. 1 What is the most efficient way to handle these losses based on tax deductions? I heard there is a max of 3k in deductions so is it as easy as only taking out the 3k worth of shares? So 3k 45.5 price per share 66 shares a year? and 2 In order to take out that 3k i need to pay for the testing, what is the best option I have? Thank you all in advance for the helpfeedback.  <response>: Capital losses offset capital gains. If you have net capital losses which seems to be the case for you you can deduct 3kyr from ordinary income. So if you lost 18k and have no realized capital gains, you can deduct 3kyr from ordinary income for 6 years.Youre definitely going to want to read up on that and make sure to include it in your taxes. 2 In order to take out that 3k i need to pay for the testing, what is the best option I have?You can save up the money, borrow the money, or take a loan off you 401k. 