401a- Pension with Cost basis
A client wanted to directly rollover the pre-tax portion of their 401a-pension account into their IRA. the cost basis amount was deposited into the checking account. and the pre-tax amount was transferred into the IRA. can the cost basis amount now be moved into the client’s existing Roth? if so, is there any documentation needed at tax time or thereafter.
thank you
Permalink Submitted by Marvin Rauchbach on Tue, 2024-12-10 18:07
Turns out the company sent the cost basis to the client’s checking account as requested, but then transferred the rest of the 401a/pen to an IRA without sending out the required min distribution, even though the client filled out the RMD form and is required to take RMD this year. Am I correct that the best fix is to “stop pay” on the check , tell the company to take out the RMD and then transfer the difference to the IRA.
thank you
Permalink Submitted by Marvin Rauchbach on Wed, 2024-12-18 06:53
The check was sent to the new IRA custodian without taking out RMD. does the cost basis distribution satisfy the RMD or do the dollars coming out have to be pre-tax. should the check be sent back to the original custodian to have the RMD removed prior to the account be sent to the new IRA custodian?