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No, you may not subtract those capital losses except to the extent of $3,000. per year. The excess of capital losses over any capital gains may be carried forward and used again ordinary income, such as withdrawals from your TSP in future tax years. So, you may want to defer withdrawals in excess of the $3,000. to next year (2016) to at least be able to tax advantage of an additional $3,000. of TSP withdrawals.
Since the TSP is a retirement plan, there is no penalty for withdrawing your money during retirement. If you stop working for the federal government, you can start making retirement withdrawals when you turn 55. If you keep working for the federal government, you need to wait until you turn 59-1/2. You will still owe income tax on your entire retirement withdrawal.
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