Jump to content


Photo

Determination of the taxable portion of a 401K rolled over to an IRA


  • Please log in to reply
5 replies to this topic

#1 pete30075

pete30075

    Registered User

  • Registered
  • 3 posts

Posted 01 February 2005 - 09:26 PM

Situation:
Husband retired and rolled his 401K to an IRA. The IRA contains around $450K. Now husband is getting divorced and is transferring half of money to wife as part of settlement. Wife needs to know what portion of the transferred IRA is taxable since the original 401K had a non-taxable and taxable portion. Husband is 68 and wife is 63. Husband says he does not have records of the 401K distribution/rollover.

Question:

How does one determine the taxable portion of a 401K rolled over to an IRA?

#2 Bird

Bird

    Registered User

  • Sitewide Moderator
  • 2,656 posts

Posted 01 February 2005 - 10:28 PM

Unless there was a mistake, the taxable portion rolled over was 100%. There may have been other (non-taxable) monies that were paid but not rolled over.

#3 pete30075

pete30075

    Registered User

  • Registered
  • 3 posts

Posted 02 February 2005 - 08:20 AM

Would the taxable portion still be 100% if the company contributed 3% and the Husband 6%?

#4 SoCalActuary

SoCalActuary

    Registered User

  • Registered
  • 1,718 posts

Posted 02 February 2005 - 11:24 AM

Ask the taxpayer for the 1099r issued when the rollover occurred, and it should show the amount rolled.
Then look at the account balance (if available) before the rollover.
If the IRA trustee did not take the after-tax money, then the rolled amount is all taxable.
If the IRA trustee did take the entire balance, then you only have recourse to the recordkeeper of the original account.

Edited by SoCalActuary, 02 February 2005 - 11:24 AM.


#5 mbozek

mbozek

    Moderator

  • Sitewide Moderator
  • 5,142 posts

Posted 02 February 2005 - 12:33 PM

When was the distribution rolled over to the IRA? Prior to 2002 after tax money could not be rolled over to an IRA.
mjb

#6 WDIK

WDIK

    Registered User

  • Sitewide Moderator
  • 2,109 posts

Posted 02 February 2005 - 01:13 PM

Would the taxable portion still be 100% if the company contributed 3% and the Husband 6%?

It appears that the 6% that you refer to are salary deferral amounts under a
401(k) provision. These were contributed pre-tax, so they would be taxable when withdrawn.

It also appears that the 3% that you refer to is an employer matching contributions. These amounts were not taxable to the participant when contributed, so they would be taxable when withdrawn.
...but then again, What Do I Know?