transferring after tax IRA to after tax 401k then to roth IRA
I have a client that has an after-tax IRA and would like to transfer that to his after tax 401k then once he retires transfer the after 401k to a Roth IRA….I can’t find any information on doing this. Has anyone done this or know anything about it?
Permalink Submitted by Alan - IRA critic on Thu, 2017-03-16 20:55
IRA basis cannot be transferred into a 401k account, and any 401k plan that discovers such a rollover must take immediate action to distribute it back out of the plan. Due to this rule many 401k plans still do not accept rollovers from IRA accounts that are not rollover IRAs. If this 401k account does accept IRA rollovers, the client could roll his pre tax IRA value (which is the excess of the value of his owned IRAs in excess of his 8606 basis), then convert the IRA basis tax free to his Roth IRA. That would be even better because the IRA basis would get to his Roth IRA sooner and start generating earnings in the Roth.