Personal Investments • Re: Mega Backdoor Roth/Roth IRA question

Let's say my IRR's non-taxable portion is $900 (Box 5 of Form 1099-R), and the taxable portion is $9 (Box 2a of Form 1099-R). When I roll them over from the Roth 401K to the Roth IRA, I am sure that $900 should go into box 22 of form 8606 because they are considered an "investment in the contract." Where should the taxable portion ($9) be reported?

You're asking what to do when you: "roll them over from the Roth 401K to Roth IRA". Nothing. Section 3 of Form 8606 isn't needed at that point. You don't fill out Box 22, and there's no tax or penalty to be reported. (Well, the total rollover does get reported as a nontaxable amount on 1040 Line 5a.)

Now suppose you go on to do a nonqualified distribution of these funds after they've been rolled over. That's when you'll fill out Box 22. The $9 that's subject to a 10% penalty is reported on Form 5329.

Statistics: Posted by ssel — Tue Oct 29, 2024 12:52 am

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