IRS Publication 590 (for 2007 tax returns) says that starting January 1, 2008, money in a 401k plan can be rolled over directly into a Roth IRA but only by those whose MAGI is below certain limits (as described in the Publication for rolling over Traditional IRAs into Roth IRAs). The text makes no mention (that I could find) of rollovers of Roth 401k money into a Roth IRA, and so it is unclear to me if MAGI limits also apply to those wanting to roll over Roth 401k money into a Roth IRA. If MAGI limits *do* apply, is the only choice to wait for Tax Year 2010 when MAGI limitations are supposed to disappear (the 401k trustee will not be happy because the rollover is being sought due to separation from service with the employer), or can the Roth 401k money be rolled over into a Traditional IRA during 2008 with an increase in IRA basis equal to the post-tax contribution into the Roth 401k account?
Dilip Sarwate