dmertz,
Thank you for reviewing my inquiry and your follow up question.
I prefer to maximize funds in both the Traditional and Roth 401k’s with the provider because I like the trading platform and investment options. My understanding is that trading within the 401k will not bust a SEPP like contributions or distributions (within same account) will, correct?
Additionally, I have been doing in-plan Roth conversions for several years to establish taxed “basis” in the Roth 401k. After the 5 year re-capture period for each conversion, I roll over part of the Roth 401k (basis and earning) each year, so that I can withdraw the basis portion without tax liability. I would discontinue the annual in-plan conversions to set up the SEPP. The rollovers (Roth 401k to Roth IRA) that I have done show $0.00 in box 10 of 1099. I suspect a full rollover would trigger a value in that box and I haven’t figured out the implication on subsequent IRA withdrawals. I suspect (but haven’t fully researched) that I could roll over the entire amount in the Roth 401k and then withdraw basis on appropriate schedule to not trigger each 5 year recapture. However, I figure it’s easier and “cleaner” to just keep rolling over on an annual basis (and keep funds maximized in preferred trading platform and investment options).
