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This is from IRS Pub 590 for 2004 (2005 not on IRS web site yet)

Reporting rollovers from employer plans. Enter the total distribution (before income tax or other deductions were withheld) on Form 1040, line 16a, or Form 1040A, line 12a. This amount should be shown in box 1 of Form 1099-R. From this amount, subtract any contributions (usually shown in box 5 of Form 1099-R) that were taxable to you when made. From that result, subtract the amount that was rolled over either directly or within 60 days of receiving the distribution. Enter the remaining amount, even if zero, on Form 1040, line 16b, or Form 1040A, line 12b. Also, enter 'Rollover' next to line 16b on Form 1040 or line 12b of Form 1040A.

My situation is that I rolled over a 401k to an IRA last year. In round numbers the total 401k amount was $380K of which about $70k was after tax money. The way I read the above, I would report this on my 1040 as follows:

line 16a = $380K
line 16b = zero with the word "Rollover" written in.

Fine so far, but where do I document the fact that $70k of the rollover is already taxed money? I figure it is form 8606 so in looking over that form, it looks like I put the $70k on line 2 of that form.

So, that it. Seems too simple. Do I have it right? Am I overlooking something?


in looking over that form, it appears I don't file it until I start taking distributions which is six years from now. Is there anything I need to file with my 2005 return to advise the IRS that there is $70k of after tax money in this rollover IRA?

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