Post 86 after tax from 401k to Roth IRA
With regards to a 401k, made up of pre tax and post tax contributions, if the plan allows for the participant to roll the after tax portion into a Roth Ira, is the participant subject to roth income eligibility?
Also, if the client has lost money in the 401k, and the post tax contributions represent now a smaller balance in the plan, and the client takes the post tax via check, is there any way to write off the loss on taxes?
Permalink Submitted by Alan Spross on Thu, 2009-01-08 18:26
The income eligibility for Roth conversions applies this year. Whether the converted funds are post or pre tax is immaterial, as this would still be considered a conversion.
The only way to take a misc itemized deduction would be the distribution of the entire 401k account in a situation where the amount received was less than the after tax contribution balance in the account.