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Subject:  Re: Elementary, my dear watson Date:  2/4/2000  11:07 PM
Author:  TwoJs Number:  27261 of 127642

I have a 401(k) still with a former employer. It's about $500,000; they tell me that if I roll it out, around $100,000 will be taxable because it was "after tax" contributions. Can you tell me the rate at which it will be taxed? (I'm currently in the ~~40% bracket, and I'm thinking that's the answer, but I don't know.)

If you are rolling it over to a traditional IRA, I would think there would be no tax implications at this time. The after-tax contributions should be basis is your newly created IRA, which will actually save on tax when you start taking distributions.

I also have a chunk at MSDW which I'm thinking of rolling into the same self-directed IRA (at Schwab) and I assume (and I know how to parse that word) that there won't be any tax implications there, as long as I do it right. Right?

Correct. Simply transfering an IRA shouldn't trigger a taxable event.

PS - Marti, MSDW stands for Morgan Stanley Dean Witter. It's tough keeping up with all the acronyms these days.

Hope I was helpful.


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