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Need2Know2
Level 2

Tracking cost basis - does 401k count as "Traditional IRA"?

I think this is a simple question, but the answer isn't obvious to me. On TurboTax, I'm trying to fill in the fields for tracking my cost basis for my Roth IRA. In 2017, I converted a 401k from my previous employer to a Roth IRA. I think it was a trustee-to-trustee transfer; I got a check for the 401k, then sent it to the company with whom I had a pre-existing Roth. They put the check in a "Rollover IRA brokerage account," which I then transferred to my pre-existing Roth.

 

So...to track my cost basis, TurboTax is asking me to enter all previous contributions, but NOT to include amounts converted from a "traditional IRA." I am aware that a 401k is not technically considered an IRA, but for this purpose, would it be considered a traditional IRA? That is, would I NOT include the amount converted from my 401k in the contributions section, then fill in the amount later when the program asks about conversions from traditional IRAs?

 

Thank you!

2 Replies
macuser_22
Level 15

Tracking cost basis - does 401k count as "Traditional IRA"?


@Need2Know2 wrote:

I think this is a simple question, but the answer isn't obvious to me. On TurboTax, I'm trying to fill in the fields for tracking my cost basis for my Roth IRA. In 2017, I converted a 401k from my previous employer to a Roth IRA. I think it was a trustee-to-trustee transfer; I got a check for the 401k, then sent it to the company with whom I had a pre-existing Roth. They put the check in a "Rollover IRA brokerage account," which I then transferred to my pre-existing Roth.

 

So...to track my cost basis, TurboTax is asking me to enter all previous contributions, but NOT to include amounts converted from a "traditional IRA." I am aware that a 401k is not technically considered an IRA, but for this purpose, would it be considered a traditional IRA? That is, would I NOT include the amount converted from my 401k in the contributions section, then fill in the amount later when the program asks about conversions from traditional IRAs?

 

Thank you!


Yes, you must manually enter the basis from your 401(k) that in the previous non-deductible contributions.   Once rolled into an IRA it is treated as a non-deducible contribution to that IRA.

 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Need2Know2
Level 2

Tracking cost basis - does 401k count as "Traditional IRA"?

I'm still a bit confused...when I converted my 401k, it went into a temporary IRA account at the company with whom I had a pre-existing Roth. Then I transferred it from that temporary account into my Roth IRA. So for the purpose of entering it into TurboTax, it would be considered a conversion from a traditional Roth, right? 

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