Hello,
I left my employer and the offset my 401k loan before I rolled the remaining balance into my 401k at my new employer.
I understand that if I do a “60 day rollover” of the offset amount into a traditional IRA, I can avoid the taxes and penalty for early withdrawal. I would also like However, I regularly perform rollovers from my traditional IRA to my Roth IRA (back door Roth). I also understand that once you mix pretax and taxes dollars in your traditional IRA, you will get taxes even on your backdoor Roth rollovers and I would like to avoid this.
If I rollover the loan offset to my traditional IRA then roll that over to the Roth IRA, will I still be taxed? If I will be taxed, will I still be able to avoid the 10% early withdrawal penalty?
