Roth funds in a Traditional IRA

Hello, I have a client that rolled over a traditional IRA and a Roth IRA to my company. The previous B/D sent over 2 checks to fund the accounts. The B/D has know reached out to my client to let them know that half of the check to fund the traditional IRA where actual Roth funds. The checks have been cashed and invested, any thoughts on what to do with the Roth basis that is now in the traditional IRA? Any feedback would be greatly appreciated.

Thank you.



  • If the data provided by the BD is conclusive, your company can correct the error, but also must correct any tax reporting forms such as Form 5498 which are now rendered incorrect. Therefore, this type of error is easier to correct the sooner it is repored. If other transactions have taken place or the error occurred some time ago, correction can become a real can of worms. 
  • Hopefully, your firm (or the IRA custodian if different) have someone experienced in unwinding this error. Perhaps any costs can be billed to the responsible BD is that party is clearly fully responsible for the error. It seems odd that they could make this type of mistake, but at least they admitted it.


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