[quote=SK in CV][quote=flu]
The only reason why I wanted I keep money rolled from a traditional 401k into a separate rollover IRA account different from an IRA account that I contributed to with after tax dollars is because for me i thought it would be easier when I start taking distributions for it. I can assume account X is entirely pretax contributions while account B is with after tax contributions…in case I get more senile in my old age.[/quote]
Only 2 numbers are important to figure out how much is taxable when you begin taking distributions. The FMV of ALL your IRA’s as of 12/31 of the prior year and dollar amount of non-deductible contributions. Earnings in one account v another is immaterial.
If you put $5000 in non-deductible contributions 10 times into 1 account and it never earned a dime for 10 years and is still exactly $50,000, and also have a $400,000 rollover IRA, distributions will be 50,000/450,000 non taxable for the 1st distribution, no matter which account it comes from.[/quote]
The problem is that you have to take the brokerages record as gospel, and I have had a problem on a Rollover that I had to correct. Not all brokerages may create the problem that I had (was the source not destination acct) and it probably depends which source has the post-tax(for likelihood for it to occur). The IRS takes the brokerage’s numbers over yours. Fore-burned, forewarned. It is not guaranteed that you will have the same problem as I.
Using your numbers, what happened was that the post tax contrib of $50,000 became 0/500,000 non taxable, instead of 50,000/450,000. I caught it fairly quickly though.
