dmertz
Level 15

Retirement tax questions

Your rollover from the Roth 401(k) to the Roth IRA was a distribution from the Roth 401(k), and was a qualified distribution because you were over age 59½ and had met the 5-year qualification period in the Roth 401(k).  It was just not a distribution paid to you personally.

 

Because you had met the qualification requirements for the Roth 401(k), the entire amount rolled over from the Roth 401(k) to the Roth IRA became contribution basis in the Roth IRA.  The ratio of contributions to earnings in the Roth 401(k) is entirely irrelevant because your Roth 401(k) is qualified.

 

With $200k rolled over from your Roth 401(k) to your Roth IRA, you can distribute up to $200k from your Roth IRA without dipping into any amount that would be earnings in the Roth IRA.

 

"What is the determining factors for the basis of Roth 401K becoming the basis for Roth IRA rollover?"

 

The determining factor is whether or not your Roth 401(k) was qualified at the time of the distribution and rollover.  See CFR 1.408A-10 Q&A-3 which includes, "Thus, the entire amount of any qualified distribution from a designated Roth account that is rolled over into a Roth IRA is treated as a regular contribution to the Roth IRA."  https://www.law.cornell.edu/cfr/text/26/1.408A-10

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