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Retirement tax questions
Notice 2014-54 does *not* apply because the distribution in 2017 is/would be from an IRA, not from a 401(k). Once the money has been rolled over to the IRA, in this case via recharacterization of the Roth rollover, IRA rules apply. The fact that the money originally came from a 401(k) is irrelevant to the application of the IRA pro-rata calculation. Upon rollover to the IRA, the money immediately loses it's character as having anything to do with a 401(k).
The transition rule of Notice 2014-54 applies only the original distribution from a qualified plan, *not* to a subsequent distribution from an IRA. The transition rule simply means that the rule can be retroactively applies in reporting the distribution from the qualified plan; many people (apparently including yourself) did split distributions under the principal of Notice 2014-54 before the IRS officially blessed the procedure in Notice 2014-54. Your distribution was effectively un-split as a result of the recharacterization, no different than had you rolled the entire 401(k) distribution directly to the traditional IRA.
The transition rule of Notice 2014-54 applies only the original distribution from a qualified plan, *not* to a subsequent distribution from an IRA. The transition rule simply means that the rule can be retroactively applies in reporting the distribution from the qualified plan; many people (apparently including yourself) did split distributions under the principal of Notice 2014-54 before the IRS officially blessed the procedure in Notice 2014-54. Your distribution was effectively un-split as a result of the recharacterization, no different than had you rolled the entire 401(k) distribution directly to the traditional IRA.
‎June 6, 2019
3:38 AM