After-tax money in the traditional account of a 401(k) *can* be rolled into an traditional IRA. However, since the IRS issued Notice 2014-54, it makes more sense to roll the after tax portion to a Roth IRA. In this case, it seems that the after-tax money from the traditional account in the 401(k) was rolled over to a traditional IRA creating basis in nondeductible contributions in the traditional IRA.
