Client performed a partial 401k rollover. Plan balance was 500k and rolled over 400k. The 400k was Pre Tax, Roth and after tax funds. Rollover check for 325k to clients Trad IRA, 50k to his Roth IRA and after tax funds of 25k payable to client.
If I understand the pro rata rules the remaining funds in 401k are similar ratios of rollover checks.
In hindsight it seems the client could have rolled over all or a majority of his after tax funds to a Roth IRA. Is this correct? I was told by a CPA the after tax amount would have to follow pro rata rules since it was a partial rollover and not a full rollover requiring most of 25k after tax check to be placed on Trad IRA then client would have to track this during redemption period.
Upon receiving the after tax check, can he rollover any of these proceeds to his Roth IRA via 60 day rollover rule?