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DeluxeXL t1_iuk20bq wrote

Reply to comment by supersonic_528 in After-tax 401K to Roth IRA -- pro rata taxes by supersonic_528

>> Pre-tax and after-tax 401K accounts are considered separate pools, so for the aforementioned after-tax 401K to Roth IRA rollover, no tax will be paid on pro-rata basis based on the amount I have in pre-tax 401K.

> Is this true

Yes, it is true. Each 401k subaccount is its own pool.

Your after-tax subaccount contains

  1. after-tax contributions
  2. pretax earnings, if any -- this only happens if you don't immediately roll out after your after-tax contribution.

When you roll out of this subaccount, you must roll out both 1 and 2 and nothing else.

The IRS agrees:

> Notice 2014-54 doesn’t change the requirement that each plan distribution must include a proportional share of the pretax and after-tax amounts in the account.

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