Rollover and Pro-Rata

Office Hours
#1

Hi Jeremy,

I plan to rollover my Traditional 401k contribution from my previous employer to a Traditional IRA. I don’t currently have a Roth IRA because I am married filing separately but plan to use the backdoor Roth IRA. Will the pro-rata rule kick in the following situations:

  • Scenario 1. I rollover $9,500 from my Traditional 401k to Traditional IRA and do not use the tax break. I then use the backdoor Roth IRA and transfer $6,000 (of the $9,500) to my Roth IRA
  • Scenario 2. I rollover $9,500 from my Traditional 401k to Traditional IRA and used the tax break and then transferred $6,000 (of the $9,500) to my Roth IRA
  • Scenario 3. I rollover $9,500 from my Traditional 401k to Traditional IRA and do not use the tax break. I then put in an additional $6,000 to my Traditional IRA and immediately transfer the $6,000 to my Roth IRA
  • Scenario 4. I rollover $9,500 from my Traditional 401k to Traditional IRA and used the tax break . I then put in an additional $6,000 to my Traditional IRA and immediately transfer the $6,000 to my Roth IRA

Thanks!

#2

I’ll cover this in tonight’s office hours (10/28/2020) with the recording available afterwards on the course site!

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