I took an in service rollover on 50% of my 401K to an IRA. When the rollover was processed, the bulk of it went to the IRA as expected however a portion (approx. 6%) was rolled into a standard brokerage account. I was told this amount was from excess contributions made in prior years and could not be rolled to the IRA. I received a 1099-R for this amount with a 1 in box 7. Box 2 is $0.00 (not blank) and both check boxes in 2A are empty. The question is, what do I do with this amount? I assume there is a tax/penalty implication for keeping it in a brokerage account. Since I was already taxed on the principal amount and have no idea what portion of the distribution was post tax I am not sure exactly how this works. Can it now be rolled from the brokerage account (within 60 days) to a Roth to avoid tax and penalty? Any insight you have on this situation would be much appreciated!
