Tax question regarding the Pro-Rata rule for a Backdoor Roth conversion.
I rolled over my Vanguard IRA (comprised of a rollover from a previous employer's 401k) to my current 401k in preparation to do Backdoor Roth conversion in future years.
My rollover was withdrawn from Vanguard IRA on December 27, 2023 and deposited to my 401k on January 2, 2024. On December 31, 2023 my IRA balance was zero but the funds were in transit to the 401k.
Would the in-process transfer trigger the pro-rata rule for purposes of a backdoor Roth conversion in 2023? If yes, would I then be free of the pro-rata rule for the year of 2024? Or must I wait until 2025 to avoid triggering this rule?
Thank you very much
I rolled over my Vanguard IRA (comprised of a rollover from a previous employer's 401k) to my current 401k in preparation to do Backdoor Roth conversion in future years.
My rollover was withdrawn from Vanguard IRA on December 27, 2023 and deposited to my 401k on January 2, 2024. On December 31, 2023 my IRA balance was zero but the funds were in transit to the 401k.
Would the in-process transfer trigger the pro-rata rule for purposes of a backdoor Roth conversion in 2023? If yes, would I then be free of the pro-rata rule for the year of 2024? Or must I wait until 2025 to avoid triggering this rule?
Thank you very much
Statistics: Posted by Obscure2741 — Mon Jan 08, 2024 2:54 pm — Replies 3 — Views 90