Rollover from trad IRA to 401K - taxable issue?

[rxmurphy]

Hi, i'd like to be able to do some Roth conversions in the future but I made some non-deductible contributions to my trad IRA at Vanguard. I opened another trad IRA at Vanguard and transferred the same amount of money as the non-deductible contributions from original IRA account and put in in a MM fund. Now to transfer what's left out of Vang to my Fido 401K, I think I have to sell the whole thing because the funds in the 401K are not the same as the funds in the IRA. Can't be transferred in kind. Is this a taxable event? Concerned because the it is high 6 figures. Thanks for any guidance.

[phildonnia]

I think you may have this backwards.  If you made non-deductible contributions to your traditional IRA, then these would not be taxable, and wouldn't present a problem for a future conversion. 

Do you mean that you have a large existing deductible IRA?  That is usually the problem for people who want to convert to Roth, as there is no way to separate the non-deductible funds, and so the conversion will be taxed in proportion.

If that's the case, then I have heard that a strategy is to roll a deductible IRA into a 401(k) to get it out of the way.  I don't think that it needs to be the same funds, just the same type of arrangement.

I'm interested how you sort this out, because I have similar problems.

[MDM]

Now to transfer what's left out of Vang to my Fido 401K, I think I have to sell the whole thing because the funds in the 401K are not the same as the funds in the IRA. Can't be transferred in kind. Is this a taxable event?

No.  Rollovers from one pre-tax account to another incur no taxes.  You should get a 1099-R showing the amount rolled over, but none of it should be taxable.

As phildonnia noted, are you asking about the backdoor Roth process?