Contact UsIf a recent retiree rollover a 401K to an IRA, and turn around and make a withdrawals can the rollover 401K funds be considered his basis on Form 8606?
This taxpayer, retired 1/2016, and rollover $142,132 from a 401K to a Rollover IRA With Fidelity Investment. He turned around and withdrawn $93,569. Which he received a 1099R, showing that it is taxable and the "taxable amount not determined" box checked. How is this reported on Form 8606
His 2016 Fidelity Investment Report shows a beginning bal or zero and $197,457 Addition during 2016 (including the $132,132 401K Rollover ). $93,570 was withdrawn, leaving a balance of $60,830 on 12/31/16. Also, there's is $55,326 (included in the $197,457 not accounted - I don't know how it got there, the report don't reflect how it got there, and he doesn't know) . Fidellity transferred the $55,326 out to purchase more security. Can he use the the $55,326, plus the $142,132 401K rollover as his Basis on line 2 of Form 8606.
His 2016 Fidelity Investment Report shows a beginning bal or zero and $197,457 Addition during 2016 (including the $132,132 401K Rollover ). $93,570 was withdrawn, leaving a balance of $60,830 on 12/31/16. Also, there's is $55,326 (included in the $197,457 not accounted - I don't know how it got there, the report don't reflect how it got there, and he doesn't know) . Fidellity transferred the $55,326 out to purchase more security. Can he use the the $55,326, plus the $142,132 401K rollover as his Basis on line 2 of Form 8606.
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Tax Professional Answers
John Stancil
Basis is obtained only when the taxpayer makes contributions to the retirement plan and pays tax on those contributions, as one would with a non-deductible traditional IRA, or a Roth IRA. If he had no basis in the 401(k), he doesn’t get basis just by transferring it to an IRA. As far as the $55,326 you need to determine if there was basis in that previously. You should be able to tell by referencing Form 8606 is it was properly completed.
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309 weeks ago