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401k to Roth IRA conversion

Hello! 

 

I asked this question before, but I'm still a bit confused. In 2017, I converted an employer-sponsored 401k to a Roth IRA. I think it was a trustee-to-trustee transfer; when the money was transferred to the company with whom I already had a Roth, they put it in a "rollover IRA brokerage account," then from there I moved it into my Roth IRA. So, do I count that converted amount as an amount that was converted from a traditional IRA? When tracking  my cost basis for my Roth on TurboTax, it has me fill in previous contributions, and previous conversions "from a traditional IRA." It doesn't give me any option to fill in previous conversions from a 401k. So, does my 401k conversion count as a "traditional IRA conversion"? 

 

Thank you! 

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2 Replies

401k to Roth IRA conversion

It’s two separate transactions.  You rolled over the 401(k) into a private (pre-tax or traditional) IRA, and then in a separate step, you rolled the traditional IRA over into a Roth IRA, which is also called a conversion.  I assume you paid income tax on the conversion amount?  The amount you paid tax on is the basis amount added to the Roth.  

401k to Roth IRA conversion

Thank you very much for your reply! Yes, in 2017 the amount converted was taxed. I think perhaps I'm just over-thinking and letting myself be confused by the difference between a 401k and a traditional IRA. I think when doing my taxes before, I always just assumed a 401k WAS a traditional IRA. But when reading the information in the TurboTax program this year, I realized it was different, and then wasn't sure how to input my 401k to track its cost basis for my Roth. But since I converted the 401k to a (albeit temporary) traditional IRA before putting it in a Roth, all I need to do is put in that amount which was converted from the traditional IRA. In other words, to track my cost basis for my Roth, TurboTax is asking for previous contributions to my Roth plus the amount converted from the IRA (which was originally a 401k). Does that sound correct? 

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