IRA rollover

[cdavis25]

A participant has a Simple IRA, a Traditional IRA, and a non-deductible IRA.  All three are separate IRAs.  Their employer started a new 401(k) plan that accepts rollovers from IRA and qualified plans.  They want to rollover the Simple IRA and Traditional IRA into their 401(k) plan.  Do they have to account for the non-deductible IRA and the after tax money, even if they do not rollover that non-deductible IRA?

 

Also, say the 401(k) allows for after tax contributions and in-plan Roth rollovers.  Rollover money can be distributed at any time in the 401(k) plan.  Can you rollover the non-deductible IRA into the plan too and then, do the in-plan Roth rollover?

[Flyboyjohn]

Point of clarification: there's no such thing as a "non-deductible" IRA, it's simply a Traditional IRA housing contributions (and related earnings) that were not deductible.

I believe the long standing rule that you can't roll "basis" amounts in an IRA into a qualified plan is still in effect so your client's basis needs to be left behind in one of the Traditional IRAs and should then be converted to a Roth IRA with no immediate taxable income.

 

[joel]

Client participates in employer 401(k) plan.  His tax-free basis in company stock is  worth$121,000. May this amount be rolled over to a Roth IRA?