60 day rollover with ROTH Ira
If I do a 60 day rollover on my ROTH account, what am I rolling back? Basis or earnings?? Example: $10,000 is basis, $5,000 earnings. I take $12,000 out and roll back $8,000. What does the $8,000 represent?
If I do a 60 day rollover on my ROTH account, what am I rolling back? Basis or earnings?? Example: $10,000 is basis, $5,000 earnings. I take $12,000 out and roll back $8,000. What does the $8,000 represent?
Permalink Submitted by Alan Spross on Tue, 2008-05-27 23:32
You don’t report the 8,000 that is rolled over on Form 8606, only the 4,000 that remains as a distribution. Under the ordering rules for non qualified distributions, your contributions (basis) comes out first and since you have 10,000 in basis, the 4,000 will be tax and penalty free. Your remaining basis will then be reduced to 6,000.
On Form 1040, line 15a will show 12,000, and 15b will show -0- as documented on your 8606. You will enter “Rollover” next to 15b.