Roth 401K to a Roth IRA Basis
Hello,
If the Roth 401k is rolled over to a Roth IRA, is the basis for distribution purposes the rolled over amount?
or the original contribution she’s put in?
Also, the roth ira is less than 5 years old and the owner is only 45. What amount from the roth ira can be taken out as cost basis or contribution?
Thanks!
Permalink Submitted by David Mertz on Wed, 2018-01-17 13:22
Permalink Submitted by Alan - IRA critic on Wed, 2018-01-17 18:47
I agree, and to further clarify a rollover with a loss, the Box 5 amount will exceed the amount actually rolled over and the Roth IRA will acquire regular contribution and/or conversion basis from Box 5. That said, Box 5 cannot break out the elective deferral basis from the IRR basis, the total IRR amount in the last 5 years does not break out these amounts by year or by taxable/non taxable IRR amounts, therefore the 1099R is only partially useful for Roth IRA accounting purposes. In these cases, the Roth owner will need to develop the actual breakdown from plan statements, prior 1099R forms etc and this isn’t likely to get done with the average taxpayer. The IRS needs to button these things up if they want proper Roth IRA 8606 reporting. Of course, most taxpayer are probably able to delay Roth IRA contributions until their Roth is qualified and if so they can forget this complex recordkeeping.