Author Topic: cost basis rolling 403b -> TIRA -> Roth ?  (Read 1077 times)

bortman

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cost basis rolling 403b -> TIRA -> Roth ?
« on: March 23, 2018, 09:05:00 AM »
The How Much Is Too Much In Your 401k thread sent me back to review the original MMM post.

From MMM's blog:

Quote
Strategy 2: Use the Roth IRA Escape Hatch Loophole
...
At this point, you can withdraw all of the principal (but not the gains yet, no big deal), penalty-free!


The "but not the gains" part got me to thinking .. how do I get the cost basis of the 403b that I plan to roll into a TIRA?

I've been contributing to a TIAA 403b for about 15 years. In 2011 I rolled my previous employer's 403b into my current 403b to make things easier to manage.

I have some of my statements from all those years, but not everything.

Will my TIAA 403b report the cost basis when I roll to a TIRA? Or, am I on my own to figure out exactly what I've contributed?


MDM

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Re: cost basis rolling 403b -> TIRA -> Roth ?
« Reply #1 on: March 23, 2018, 12:47:36 PM »
If all your contributions to traditional accounts were pre-tax, then all withdrawals from traditional accounts (including conversions to Roth accounts) will be taxed as ordinary income.

seattlecyclone

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Re: cost basis rolling 403b -> TIRA -> Roth ?
« Reply #2 on: March 23, 2018, 02:52:24 PM »
More to the point, it's only really important to keep track of your original contributions when they're Roth contributions. For pre-tax funds you'll be taxed on the full amount you withdraw regardless of how much you originally put in. You'll also want to keep track of times you converted traditional retirement funds into Roth accounts. Basically, anytime you add money to a Roth account you should keep the records of that transaction indefinitely.

bortman

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Re: cost basis rolling 403b -> TIRA -> Roth ?
« Reply #3 on: March 24, 2018, 09:35:30 AM »
Thanks for the answers. I guess that was a bit of a brain fart on my end .. makes sense that cost basis doesn't figure into it until the money gets into a Roth IRA. I thought there might be some complications when going from 403b to TIRA, and then pipelining TIRA to Roth IRA. Sorry for the confusion.