Direct coversion from qualified plan
Individual has left company and had a small amount in qualified plan( 401(k)) and wants to move the funds into an existing Roth account. Can it be done directly without a conduit IRA being established? Indiviual has no other IRA’s other than the Roth.
Thanks
SC
Permalink Submitted by Alan Spross on Tue, 2012-03-20 17:28
Yes, this is known as a qualified rollover contribution with the same effect as a Roth conversion. The rollover will be taxable except to the extent the employee has after tax contributions in the 401k.