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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: Rollover to Roth Date: 2/11/1999 7:08 PM
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[[10 years ago my wife left a company for which she worked. She was vested in
the profit sharing plan which was entirely company funded. She received stock
& cash which were rolled into an IRA (no taxes paid). The trustee's basis of the
profit sharing shares was reported to us at that time.]]

So far..so good...

[[ This year we did a partial
conversion from the rollover IRA to a Roth IRA(couldn't afford to convert it all).
My question is what is her basis in the Rollover IRA? ]]

Zero...Zip...Nada...Nuttin'.

[[Is it zero because the
profit sharing was company funded?]]

Basically, yes...

[[ If so, why is the trustee's basis reported? It
would seem to be irrelevant since tax is owed on the entire amount. Any help is
greatly appreciated.]]

Because if you would have taken that distribution as a "lump sum distribution", this information would have been important to you. But you didn't. So it's not.

If you are curious about this issue, check out IRS Publication 575 at the IRS web site.

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