dmertz
Level 15

Retirement tax questions

Once deposited in the traditional IRA account, the after-tax money from the 401(k) becomes basis in nondeductible traditional IRA contributions in your traditional IRAs.

 

The next time you are required to file From 8606 Part I, you'll need to include on line 2 with explanation the amount of basis acquired from the 401(k).  In TurboTax you'll answer that you made nondeductible contributions to your traditional IRAs, click the EasyGuide button, then mark a checkbox to indicate that you rolled over after-tax money from an employer plan.  TurboTax will prompt you to provide an explanation for this adjustment to your basis.

View solution in original post