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TL3
Level 2

Backdoor Roth IRA and rollover to annuity

I did backdoor roth-ira in 2020. I also rollover 401k to annuity. Does Pro-rata rule apply to my situation? Turbo Tax asks to "Enter the total value of all traditional IRA, SEP, and SIMPLE IRA accounts on December 31, 2020. This information is sent by mail on Form 5498. " But I don't receive Form 5498. And the Annuity company doesn't have the form for me either. 

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2 Replies

Backdoor Roth IRA and rollover to annuity

A much more significant impact from this rule comes to those who decide to rollover a 401(k) or other type of company plan. Only the total value of IRA accounts is used in the pro-rata rule. 401(k) plan values, 403(b) plans and profit sharing plans are not included in the pro-rata formula. The value of one of these types of accounts would be included if you decided to rollover the plan assets to an IRA during the year.

TL3
Level 2

Backdoor Roth IRA and rollover to annuity

Thank you for the quick response! I did rollover 401k to an annuity account with Life Insurance company. But I did NOT roll over to a traditional IRA as Turbo Tax indicated. Does pro-rata rule apply to me? Guess my question should be "Is annuity account a traditional IRA account?".

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