Back Door Roth RIA
If a client transfers all of their Traditional IRA account balances into their employer’s 401K plan and then tries to do a non-deductible Traditional IRA contribution with an immediate conversion to a Roth IRA, will that conversion be 100% tax free or will the previous Traditional IRA account balances (that were transferred to his 401K) still be used to calculate the PRO-RATA amount of tax free conversion?
Permalink Submitted by William Tuttle on Mon, 2017-11-06 22:56
No, the only determination of the prorata amount is the pre-tax (traditional, SEP IRA and SIMPLE) IRA balances on 12/31.