After tax 401k to roth ira
Here’s a two part question.
If a client has a 401k made up of after tax $ and pretax $, lets say $1m total, $200k of that is after tax contributions(post ’87), and their AGI is 200k…
a) are they able to open a roth and move the after tax portion over, while rolling the remainder to a tira, or are they subject to the ‘conversion’ rules.
b) can this be done clean – without messy tax implications, even if the agi is below 100k and conversion rules are no problem
Permalink Submitted by Alan Spross on Wed, 2008-05-07 22:52
With respect to the conversion income limits, they continue to apply until 2010 with respect to direct plan conversions as well as typical conversions of a TIRA.
By the time 2010 arrives and the income limit disappears, the allocation issue that does not appear to be fully clarified at this point should be. Many experts assume that the post and pre tax amounts in a QRP can be split and transferred to the Roth and TIRAs accounts respectively, and that may well be the case, but this was not really clarified in the IRS Notices released to date on various PPA provisions.