taxes on rmd taken from ira rolled over from 401k
I rolled my 401k over to an ira. I have not made any contributions to the rollover ira. Do I have to take rmd from the contributions to the 401k until all contributions are paid out and subsequent rmd from any earnings on the contributions? If so, how will the taxes be determined on the contributions to my 401k? Will I have to determine the amount of my 401k contributions?
Permalink Submitted by Al Fry on Sun, 2008-01-13 00:53
Assuming you took the RMD from the 401(k) prior to the rollover, you can now forget the 401(k). All you have is an IRA. Your future RMDs will be based on the previous year’s 12.31 IRA balance and the current year’s age on 12.31. It will all be taxable, unless you have some cost basis in the IRA (from the 401(k). If you do, you should file an IRS Form 8606, to establish that cost basis. Then each RMD will consist of part earnings and part cost basis, and another 8606 would be filed each year. If you did not have any cost basis (after tax deductions) in the 401(k), then the entire RMD will be taxable every year.