Hello - Thank you again for the additional information. It appears that a direct rollover from a traditional 401K to a Roth IRA is simpler in paperwork/documents?
1. From traditional 401K to Roth IRA (one 1099R and one 5498)
- One 1099R from the 401K administrator (sender), showing rollover amount of $20,000 (as an example) in box 1, and 2a (taxable amt) in the same amount. code G in box 7. This is fully taxable.
- One 5498 from the Roth IRA (receiver), showing the Roth IRA receipt, for recordkeeping only.
- Tax return would show the rollover amount of $20,000 in 5b (Pension and annuities, taxable amount), with a notation of "ROLLOVER" (the notation is generated by the TurboxTax software).
2. From traditional 401K to traditional IRA, then from traditional IRA to Roth IRA (two 1099R and two 5498)
- One 1099R from the 401K administrator (sender), showing rollover amount of $20,000 (as an example) in box 1, and $zero in 2a (non-taxable). code G in box 7. (non-taxable)
- One 5498 from the traditional IRA (receiver), showing the traditional IRA receipt, for recordkeeping only.
- One 1099R from the traditional IRA (sender), showing rollover amount of $20,000 (as an example) in box 1 and 2a (taxable amt) in the same amount. code 7 in box 7 (I am over 59 1/2). This is fully taxable.
- One 5498 from the Roth IRA (receiver), showing the Roth IRA receipt, for recordkeeping only.
- Tax return would show the distribution of traditional IRA (Roth) in 4b, taxable amount of $20,000. Would it also show the rollover of 401K to traditional IRA in 5a and 5b and say (Pension and annuities), with a notation of "ROLLOVER" (the notation is generated by the TurboxTax software), but zero taxable amount? Like if I have a pension of $30,000 and 401K rollover of $20,000 - would it show $50,000 in 5a, and $30,000 (taxable pension) in 5b?
- you also indicated there would be a form 8606 generated, with part II showing the distribution of IRA to Roth IRA?
Thank you again.
