Roth 401(k) rollover to Roth IRA

[cdavis25]

A participant with Roth 401(k) deferrals terminated employment. She was 40 years old and her first deferral was in 2006. She rolled the Roth 401(k) money into a new Roth IRA in 2009.

1) Is this considered a nonqualified distribution, since she was under 59.5?

-or-

2) Since she rolled the money over to the Roth IRA, it is still qualified. The 5 year clock would be January 1, 2009, for the new Roth IRA. The code on the 1099R is H. Box one on the 1099R would be the rollover amount. Box 2a on the 1099R would be zero. Box 5 on the 1099R would be zero.

[cdavis25]

I think I found my answer. It is both. The distribution is a nonqualifed distribution. The amount can still be rolled over to the Roth IRA. Box 5 on the 1099R will have the basis in the Roth 401(k) that can be recovered in 2009 and was rolled over to the Roth IRA.

Here is another question: Say the basis was $5,000. There was a loss on the account and the balance in the account when rolled over was $4,500. Do you enter $5,000 in box 5 or $4,500 in box 5?

[Guest cmp1454]

You would report the $5000 in Box 5.