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Retirement tax questions
The relative timing of the Roth conversion and the rollover of the 401(k) to the traditional IRA is irrelevant. By not having a zero balance in traditional IRAs on December 31, 2023 you have caused the Roth conversion to be largely taxable and a substantial amount of your basis in nondeductible traditional IRA contributions to remain in your traditional IRA to be applied to future distributions. You'll have some amount basis in nondeductible traditional IRA contributions in your traditional IRAs until you have a zero balance in traditional IRAs at the end of some year. Unfortunately, rolling over a 401(k) to a traditional IRA in the same year that the individual is trying to use the backdoor Roth strategy is not an uncommon mistake.
‎February 8, 2024
5:03 PM