Good morning,
At the end of 2009 I requested a direct rollover from TRowePrice to Fidelity (to simplify things as I will be retiring in 4 years). Box 7 of the 1099-R was marked "G", referring to a "distribution that was directly rolled over to either a traditional IRA, a charity, or another qualified plan" (TurboTax).
Box 2a shows an amount of $28,823 and box 5 (employee contribution, etc.) shows $4,889. When I satrted working at the company in 1988, thy did not have a 401K yet and retirement contributions were after-tax contributions. I thought that in the case of a direct rollover, box 2a should have been zero. Not so according to TRowePrice. As we are dealing with after tax contribution (and I presume the corresponding gain of $28,823 over a 21 year period) I am now hit with approx. $3400 of Federal tax on this activity. I did not receive ANY money from the transaction and nothing went to my bank account
The regular 401K amount (to which the company switched around 1990) was rolled over to a Rollover IRA. The after tax amount was put in a Roth IRA.
Assuming I can't get out of paying Federal tax on this, is there anything that needs to be done to avoid being taxed on it again when I do start taking money out? TRowePrice indicates I filled the distribution form out incorrectly (which is possible, provoking the taxable amount of $28,823 - although I did not receive any of this money physically and the entire rollover transaction between Rollover IRA and Roth IRA are intact at Fidelity the same way they left TRowePrice).
Sorry to be longwinded - your advice will be appreciated. Thanks.
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