I'm clear on the point that by transferring the pre-tax segment of the IRA into the 401(k), the remaining all-post-tax IRA could be Roth-converted without paying tax.
What I'm not clear on is that you couldn't do the same effective transaction without the 401(k) existing. (Which seems to be your point above.) Is it an issue with un-commingling the funds within the IRA?
Sorry for being slow here!
Steve
Alan disagrees with this point, even if I were clear, I am open to being wrong.
This, I am 100% on. When you convert to a Roth, you may not designate only the pretax money, it must be prorated to reflect the ratio within your IRA. Again, all non-Roth IRAs are treated as one big, fat, IRA. Stand by.
The Qualified Charitible Contributions being an exception, with pre-tax contributions and earnings coming out first.
And I'm thinking maybe the one-time IRA -> HSA might be another?
True because it is hard coded into IRC Sec. 408(d)(8)(D). That is why I believe my statements regarding distributions are correct. Sec. 72 requires the allocation between taxable and nontaxable amounts. The charitable exclusion required an exception to Sec.
72 to allow the distribution to be treated as if the amount would have been fully taxable.I find no exception to Sec. 72 for the rollovers we have been discussing in this thread.
I didn't bother to check.
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