Sorry. I mistyped something in my original questions. Thing thing is like this:
I am working. I have non-deductible IRA which contains only after tax money. And I have pre-tax money in 401k. Now, I have converted all my non-deductible IRA to Roth IRA. So, there is no IRA money at all. Now, if I retire later this year, I am considering to roll over the 401K (I mistyped this as IRA in my original post, sorry) to a traditional IRA and thinking of convert part of it to Roth later this year. With this, I was trying to ask the two questions I posted in the original post. The questions are:
(1) When the pro-rata rule apply, what is the basis? It seems to be that it will be based on the IRA portfolio at the end of the year. But, due to the earlier Roth conversion, I do not have any money in the IRA account that had my after tax money. So, does it mean, at the end of the year, the IRA portfolio has only pre-tax money and, therefore, every single penny I conversed were taxable? If so, does it mean that my after tax money is being double taxed?
(2) I tried to look up information from the web. It is saying I am not double taxed. The IRS only allows the Roth conversion to be done proportional to the assets in the IRA portfolio. If this is the case, does it mean that some of the amount in the IRA account into which I roll over from pre-tax 401k will become after tax?
After more thinking, I have a third question.
(3) If I do a partial rollover directly from the 401K to Roth IRA, does this avoid the complication of pro-rata rule as the money that is rolled over to Roth from 401K is never put in a traditional IRA?
Sorry for my typo in my original post.
