mitchfalter <usenet[at]financialfora.com> writes:

- quote -

That's what happened until the law changed (2003?) to allow
a rollover of the after-tax contributions.

- quote -

Yes.

- quote -

Each distribution will be a combination of taxable income
and a nontaxable return of your previously taxed
contributions. See Part I of Form 8606.

- quote -

See the instructions for Line 2 of Form 8606. Your IRA
custodian has no responsibilities regarding this, so you'll
need to track your previously-taxed basis.

Phil Marti
Topeka, KS

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I am having a tough time understanding what my tax
responsibilities are regarding money that originated as an
after tax contribution to my 401k. The account was with
Merrill, where the amount originating from pre-tax employee,
employer, and after-tax contribution sources were
delineated.

I rolled the account to an IRA. I expected that my original
after-tax contributions would be returned to me, and the
rest rolled over to the IRA. The entire amount was rolled
over. This raises several questions. Can I keep this money
in my IRA? How will it be taxed upon distributions? What
records am I responsible for keeping, and what do I need to
make sure that my IRA recordkeeper knows? I am flummoxed and
would appreciate any help you folks could offer.

Mitch

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