DTH Posted April 17, 2003 Posted April 17, 2003 A participant terminates, part of the account balance contains after-tax contributions. Can the participant directly rollover the taxable portion and keep the after-tax contributions (no earnings) or does the 72 pro rata rules apply?
mbozek Posted April 17, 2003 Posted April 17, 2003 There is no requirement that the after tax amounts be rolled over - in fact it makes sense not to roll over the a/t funds because no tax is paid and the participant gets use of the money. Finally A/t funds in an IRA are a pain to administer for rmd purposes because of the allocation rules. mjb
Belgarath Posted April 17, 2003 Posted April 17, 2003 Server crashed, I'll try again. I think they are fine to roll over without the pro rata treatment. IRC 402©(2), as amended by JCWAA 411(q), treats the distribution as being first attributable to the taxable portion of the distribution.
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