Hi all,
I have a client who had a pre- and (non-Roth) post-tax balance in their 401k and last year, took what they thought was an entire distribution from the plan, directed the pre-tax balance +/- $1,000,000 into a TIRA, and the post-tax balance +/- $80,000 in a Roth IRA as a direct rollover in both cases. Custodian of 401k was Fidelity.

After their completed rollovers, a dividend was paid on the stock inside of the plan, and they never took that out until it was distributed to them in cash this year (with 20% withholding of course) automatically in February, as a 2016 distribution.

the 2015 1099-R form indicated Total Distribution, Code G, with the correct gross in box 1 and the correct post-tax in box 5. $0.00 taxable amount. no other amounts, no other boxes checked, or codes typed in.

Does the distribution of the +/- $600 in 2016, or really the presence of the $600 at year-end in the plan present a problem with the new (ish) post-tax-401k-to-Roth IRA rollover rules?

Or basically, what is the tax impact in 2015 assuming the figures above? Just to be clear the Total Distribution box was indeed checked for the 2015 1099R, even though money was paid into the plan 7 days later when the dividend was paid.

Thank you!