Hello - I want to rollover a portion of my traditional 401K money to a Roth IRA. A financial advisor told me for tax reporting, it would be better to rollover the entire 401K into a Rollover (traditional) IRA (which is non-taxable), then over time convert portions of the money in the Rollover IRA to a Roth IRA. He said the recordkeeping would be simpler to show IRS the cost basis for each conversion. However, in doing so, during the first year when I rollover the 401K into a Rollover IRA, and then convert a portion of it the Roth IRA, I would have 2 1099Rs, one for the rollover of 401K to a Rollover IRA, and one for the partial conversion of the money from the Rollover IRA to Roth. It seems that if I just move a portion of money in my 401K to Roth each year, the cost basis would be whatever the rollover amount is in that year. Not sure why the financial advisor said that it would be "cleaner" to mover all the 401K money into a Rollover IRA first, that move a portion to the Roth IRA each year. Any thoughts or input? Thank you.
