Rollover Correction Inquiry
Hello,
I have a client that did a direct rollover on 03/14/2013 for $495,000.00 however $44,000 should have go to a Roth IRA for the client. Since it has been over 8 years that the $44,000 has been in the client’s traditional IRA what if any options would they have to get the $44,000 into a Roth IRA?
Any insight would be greatly appreciated. Thank you.
Permalink Submitted by Alan - IRA critic on Tue, 2021-10-12 18:20
The only way is to roll his TIRA balance less his total basis (44,000?) into an accepting current employer plan. He could then convert the 44,000 tax free to Roth. He would file Form 8606 to report his IRA basis whether he can do this rollover or not. He should also look into possible documentation of the after tax balance included in the rollover in 2013 in case the IRS questions the 8606. A closing plan statement is the best documentation along with the 1099R from the direct rollover. I assume none of this rollover was from a designated Roth account in the employer plan as that changes the situation.