dmertz
Level 15

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Because regular contributions and their earnings in a 457(b) are never subject to an early-distribution penalty, rollovers from non-457(b) accounts which are subject to early-distribution penalties are required to be segregated from the rest so that early-distribution penalties can be applied on that portion when required.  That's why you see the separate portions tracked separately.

 

I don't know if the IRS would recognize your basis as still being present in your traditional IRAs.  When you rolled the funds over to the 457(b) you were required to certify that the funds contained no basis in nondeductible traditional IRA contributions.  Still, there are plausible scenarios, not quite the same as your circumstances, where basis could still be considered to be in your traditional IRAs.  For example, if you rolled over to the 457(b) all but your basis in nondeductible traditional IRA contributions and the value of the remaining investments in your traditional IRAs dropped, maybe even to zero through failed investments, you could end up with more basis than value.  The value in traditional IRAs could then be brought back up above your basis through contributions or rollovers to make the basis recoverable.  However, that basis is certainly gone if you ever (before 2018 when such deductions became suspended by the Tax Cuts and Jobs Act) took a miscellaneous deduction for the unrecoverable basis.  If you did not take such a deduction, your traditional IRA basis should still be as recorded on your last filed Form 8606 which you could justifiably carry forward to line 2 of the next Form 8606 that you file.

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