Hi Tracer-X
Following up hoping to provide more clarification about the distribution from a 401k to ROTH. Based upon what you given, and the timeline, 50K will be taxable. It will be like double taxed because you were never taxed on the original 401k of $100,000. Then you have the conversion of which ROTH grew over 3 years to $125,000. Yes, $25,000 is in ROTH earnings. Based upon your situation, you indicated that you withdraw prior to the 5 year rule. Please be mindful of the following two (BOTH) conditions must be met.
1. Age 59 1/2
AND
2. 5 years holding of the account
Hope this helps to clarify. Thank you for participating in the event. We greatly appreciate your question.
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