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The place that I did the rollover deposited the $63K into the wrong type of IRA account they deposit into a rollover ira not a rollover roth ira. Now do I have to pay taxes as a distrubtion which I in realty correcting the place I did the rollover error.
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The place that I did the rollover deposited the $63K into the wrong type of IRA account they deposit into a rollover ira not a rollover roth ira.

The problem seems to be one with terminology. There is no such thing as a "rollover roth ira". ALL "rollover IRAs" are Traditional IRAs. That's because a "rollover IRA" is what pre-tax 401(k) money used to be required to be rolled into, if you ever wanted to be able to roll the money back into a 401(k). Since then, the law has been changed to allow pre-tax money from regular IRAs, as well as 401(k)s to be rolled into a 401(k), if the plan allows. So there's not really a need for the 'rollover' designation for an IRA any longer, but many brokerages still call these accounts 'rollover' accounts.

Because 'rollover' accounts were set up solely to be able to designate money that can be rolled back into a 401(k), and Roth IRAs cannot be rolled into a 401(k), there is no such thing as a "rollover Roth IRA".

Now do I have to pay taxes as a distrubtion which I in realty correcting the place I did the rollover error.

Was 401(k) money in a designated Roth account in the 401(k)? If so, then you need to IMMEDIATELY call the brokerage where the IRA is and tell them that there was a mistake made - that the money should have been rolled into a Roth IRA because it came from a designated Roth account in the 401(k). You need to get them to correct the mistake - DO NOT try to correct it yourself, because you may very well end up causing yourself to pay taxes on a distribution. It would probably be helpful if you provide the broker with the IRA account some statements from your 401(k) showing that the money was in a designated Roth account within the 401(k).

If the 401(k) money was NOT in a designated Roth account in the 401(k), then having it rolled over to a "rollover IRA" means that you won't pay any taxes on it until you either convert it to a Roth account, or withdraw it to use or invest in a taxable account.

AJ
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Lets try again.....


I contributed $21,593.02 in a Roth 401k as an option in the 401k I had. The earnings on the roth 401k were $42,158.33. Total $63,751.33


I contributed $100 on a After tax contribution to my 401k

What happened today was the brokerage firm Rolled over $92,718.27 pretax money in my Rollover IRA. The brokerage firm deposited $63,751.33 in the Rollover IRA not Roth IRA. The brokerage firm deposited $100 into Rollover IRA not Roth IRA account.

Now I say If they don't fix this I could get audited by the IRS.
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I contributed $21,593.02 in a Roth 401k as an option in the 401k I had. The earnings on the roth 401k were $42,158.33. Total $63,751.33

That money should go into a Roth IRA. It is NOT a 'Rollover Roth IRA' because there is no such thing.

I contributed $100 on a After tax contribution to my 401k

That money can also be rolled over into a Roth IRA. Again, NOT a 'Rollover Roth IRA'. Or, if you would rather, you can take the $100 out without having to pay taxes on it.

What happened today was the brokerage firm Rolled over $92,718.27 pretax money in my Rollover IRA.

So, you had:
$63,751.33 in Roth 401(k)
$ 100.00 in after tax 401(k)
$28,866.94 in Traditional (pre-tax) 401(k)

The brokerage firm deposited $63,751.33 in the Rollover IRA not Roth IRA. The brokerage firm deposited $100 into Rollover IRA not Roth IRA account.

So, apparently the brokerage firm was not aware that the $63,751.33 was from a designated Roth account and the $100.00 was from an after-tax contribution. That could be because you filled out the forms incorrectly, or it could be because they didn't pay attention to what was on the forms you filled out.

Now I say If they don't fix this I could get audited by the IRS.

No, THEY (the brokerage firm) needs to fix it. You need to ask them what additional forms you need to fill out, or what letter you may need to write. But THEY need to move the money to the correct type of account. YOU should not attempt to move the money yourself.

AJ
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