401K Conversion to Traditional IRA - After-Tax Contribution Treatment Question

[syoung123]

Hello - I transferred/converted $200,000 of the $250,000 total amount from my 401K to a rollover traditional IRA.  The conversion is a non-taxable event.  The 401K plan administrator, which also holds my rollover traditional IRA, allocated a % of the each of my 401K holding categories (i.e., before tax and after-tax contributions) to make up the $200,000 transfer.  About $2,000 (out of the $200,000 conversion) were "after-tax amounts" in my 401K.  Of this $2,000, about $400 was contributed by me initially (with after-tax money), and $1,600 were “investment gains” on the $400 over the years.

Total 401K - $250,000

Transfer from 401K to rollover traditional IRA - $200,000

“After Tax” portion in the rollover - $2,000

My after-tax contributions - $400

Investment gains on my after-tax contributions - $1,600

On the 1099R form for this 401K conversion to traditional IRA event, Box 1 “gross distribution” shows $200,000, Box 2a “taxable amount” is blank, Box 5 “employee contributions/Designated Roth contributions….” shows $400, and Box 7 shows code “G” with IRA/SEP box unchecked.

My questions are:

1. The after-tax amount of $400 in the rollover traditional IRA should not be taxed again since I already paid tax on it.  However, this amount went into the rollover traditional IRA account, and for year 2023 the rollover is not a taxable event.  Since this is not a taxable event for 2023 anyway, how would I need to distinguish the after-tax amount of $400 so it won’t be taxed in the future when I pull money out the rollover IRA or convert the money to Roth, which will be a taxable event?  Otherwise, I’ll have to pay tax on the $400 that is “after-tax money”.  Would I track it on Form 8606 or some other form?
2. The “investment gains” on my after-tax contribution are also in the rollover traditional IRA.  Since the gains were not “contributed directly by me”, they would be taxable when I pull the money out of the rollover traditional IRA in the future?
3. When I used TurboTax Premier to input this 1099R as a test, I can’t find the $400 in Box 5 of 1099R shown anywhere on the TurboTax generated tax forms.  The screen input that I used were:  

Input - “Retirement Plan..”, “IRA..(1099R)”, “this money did not roll over to a designated Roth 401K”, “this money wasn’t roll over to a Roth IRA…”

Is there a form that is supposed to show that the $400 “after-tax money” will not be taxable?  Did I input the 1099R incorrectly, or is there a bug in TurboTax that the software can’t address this?  Or did my 401K administrator do the conversion incorrectly and the after-tax amount should have been converted to a Roth IRA instead of a traditional IRA? 

Please advise.  Thank you.

[casa95129]

Have you figured out ? 

I've a similar question - I've multiple 1099-Rs including money from before-tax and after-tax account.

Turbo Tax offers a form to track "After-Tax" amount but didn't offer a way to distinguish different 1099-Rs. 

It's very simple by manually edit total 1099-R amount and taxable amount at 1040 form item#4.

However, when Turbo Tax imports 1099-R, it mixes both Before-Tax and After-Tax as one. How to separate the amount ?  

[syoung123]

I was told to input the 1099R the way it is with the $400 in box 5.  My IRA administrator put the $400 in the Roth IRA already, so it is separated from the rollover IRA.  The form 5498 from the IRA administrator shows the total rollover amount minus the $400 that went into the Roth IRA on box 2 "rollover contributions".  So I think I am ok.  I am not familiar how TurboTax tracks and compute the input data.  You may want to re-post your question so it would be more visible to the employee tax experts and others to answer your questions.

[MarilynG1]

All 1099-R's look basically the same, and are entered in the same place in TurboTax.

 If there is a different amount in Box 2a (taxable amount) than Box 1(distribution), that's an indication that there is a basis in the account (after-tax contributions). If that applies, TurboTax asks questions to verify that the amount in Box 2a is the correct taxable amount (it usually is). 

Sometimes the 1099-R has 'taxable amount not determined' checked and Box 2a is blank.  In that case, TurboTax will ask follow-up questions to determine the taxable amount.  Normally, it's the amount in Box 1. 

Also, the Code in Box 7 distinguishes different types of distributions.

Enter the 1099-R exactly as shown (be sure to check the IRA box, if it's checked on your document).

Pay close attention to the follow-up questions TurboTax asks after entering your 1099-R.

You don't need to track the after-tax amount; the Plan Administrator distributes a % of after-tax contributions each year, based on the rules for that type of account.

Here's more detailed info on Form 1099-R. 

@casa95129