@dmertz
Thank you for the clarifications. The information you sent makes sense.
From what I have learned is anytime there is a rollover from a "Qualified" Roth 401K to Roth IRA, the entire rollover amount is now considered the new basis in the Roth IRA account. Any growth of this basis amount within the Roth IRA would be considered earnings prior to the end of the 5 year period.
Also a direct rollover from Roth 401K to Roth IRA (trustee-trustee) is considered a "distributed rollover".
Where I was getting hung up with Fidelity is they kept saying my rollover was not considered distributed but rather just rolled over into the Roth IRA. Terminology seems to be the culprit here. They also said the contributions & earnings within the Roth 401K would be transferred as well but it appears this should only apply if the funds in the Roth 401K were considered non-qualified which is not the case for me.
My last question for you is regarding the 1099-R I should be getting for this rollover in January (according to Fidelity). Is there anything on Form 1099-R I should be concerned about with regards to how it may or may not affect the "Basis" amount for the initial Roth IRA rollover? For example, I see boxes 5 and 9b that address employee contributions. If these boxes reflect my contribution amount as shown in my Roth 401K, will that affect how the IRS treats the whole rolled over amount as contribution basis?
Or does the 1099-R have no bearing on how the entire rolled over amount is treated?
Again, Fidelity is tripping me up by saying since I am not getting a check (following the 60 day rule), the rollover is not considered a distribution and the fact my Roth 401K is qualified does not seem to matter.
Fidelity also says the rollover cannot be considered a contribution to the Roth IRA as if it was, then contribution limits would apply.
