Era

Bird, yes, I'm talking a loan offset where the participant rolled an equivalent amount of money to an IRA. My uncertainty was because the "equivalent amount" (loan offset) was funded with (after-tax) cash. But I get your point that it's still a rollover. Thanks for clarifying.

I'm seeking to convert a Traditional IRA to Roth IRA (backdoor Roth). All of the contributions to the Traditional IRA were non-deductible due to income limits EXCEPT that it includes a loan offset rollover contribution (401k loan taken out, laid off, did a loan-offset rollover for the loan amount into the IRA). Is the loan offset rollover amount "deductible" or "nondeductible" for conversion purposes? Trying to calculate the pro-rata taxable amount since the account now includes investment gains that would be taxable, but don't know how to classify that loan offset contribution. Thank you for any thoughts you have.

Thank you for following up with the answers. My understanding (and I'm new to this, so please don't take it as expert!) is that the conversion can happen at any time for any amount. The real "limit" is the 6k or 7k (if over age qualification) contribution limit on "new money in" for any given year. Which would mean that you can still convert the 2021 Traditional IRA contribution to Roth today or any time, regardless of when you converted the 2020 Traditional IRA contribution. Perhaps that is what you concluded as well, but wanted to clarify for my own understanding also.

Follow-up question on this scenario (facing one myself) -- is loan offset amount rolled over into an IRA considered a deductible or non-deductible IRA contribution? Goes back to the bolded language by the initial poster that the loan offset rolled into the IRA would be done so with after-tax money, if there's no second loan from the second 401k as in his situation and the loan offset is funded with cash. I can see reasoning for both -- the loan offset being rolled over into IRA is paid for with after-tax money, but at the same time the initial 401k contribution that allowed for the loan was pre-tax. Which takes precedence?