Rollover question
Good Evening,
If a client will be rolling over an old 401(k) Plan that has both traditional/pre-tax and roth/after-tax money types w/in 1 account, how do we effectuate a Rollover into an IRA? Do most custodians permit 2 checks to be prepared – 1 for the Traditional component (being rolled into a Traditional IRA) and 1 for the Roth component (being rolled into a Roth IRA)?
If the above cannot be done, then how do we ensure the Roth gets segregated from the Traditional monies?
Thank you.
Jason
Permalink Submitted by William Tuttle on Fri, 2017-02-10 00:12
Per the IRS. “A designated Roth account is a separate account in a 401(k), 403(b) or governmental 457(b) plan that holds designated Roth contributions. Designated Roth contributions are elective deferrals that the participant elects to include in gross income. The plan must keep separate accounting records for all contributions, gains and losses in the designated Roth account.” A Roth designated account can not be rolled over to anything other than another Roth designated account or a Roth IRA.