Pre-tax dollars in 401k to a Roth IRA
Here is my question…Can a client who has already rolled his 401k to an IRA (with pre-tax basis), roll back the IRA to his solo-401k and later convert the pre-tax portion directly to a Roth IRA?
Here is my question…Can a client who has already rolled his 401k to an IRA (with pre-tax basis), roll back the IRA to his solo-401k and later convert the pre-tax portion directly to a Roth IRA?
Permalink Submitted by Alan - IRA critic on Thu, 2015-01-08 20:35
Basis is after tax, so not sure what you meant by pre tax basis. Once funds are in an IRA, only the pre tax IRA balance (of all owned non Roth IRAs) can be rolled into an accepting employer plan. If there is after tax IRA basis left in the IRA, it can be converted to a Roth IRA tax free. I think this is what you meant. Pre tax funds have never been taxed, so if pre tax funds are converted there will be taxes due.