ForumsSolo 401k Brokerage Accountconversion and account transfer

Forums Solo 401k Solo 401k Brokerage Account conversion and account transfer

  • conversion and account transfer

    Mark Nolan replied 1 year, 1 month ago 2 Members · 4 Posts
  • 3 Replies
  • Top SubjectSolo 401k,Real Estate Investments
    Top ForumsSolo 401k, Real Estate Investments

    MARK D.
    Top SubjectSolo 401k,Real Estate Investments

    March 23, 2023 at 10:33 am

    Last year in 2022 I had my 401k at T Rowe Price transferred to a solo 401k here. I also last year did a pre tax to Roth conversion after I transferred my account here, and I did receive a 1099R from you for that transfer.

    I received these questions from my accountant. Can you help me out with some answers

    You moved from your 401K. Per rule it had to first go to a traditional IRA. (That is what the 1099-R is showing) It has a code G which means roll-over to a traditional IRA. Then if you moved it to a ROTH next it would be another rollover from the traditional IRA to a ROTH producing another 1099-R with that code. Typically, that is a Code with a 2 in the box. We need that 2<sup>nd</sup> 1099 for the traditional to the ROTH. That is the 2<sup>nd</sup> part. Also give us what we need to properly report it on form 8606 with the IRS.

    Also, curious why there is a G because I thought it is a 401k not IRA.

    MARK D.
  • Mark Nolan

    Top SubjectSolo 401k,Solo 401k Contributions
    Top ForumsSolo 401k, Solo 401k Contributions

    Mark Nolan

    Mark Nolan

    Top SubjectSolo 401k,Solo 401k Contributions

    March 24, 2023 at 8:35 am

    Unfortunately, thi is a common misconception made by professionals who are not seasoned with the compliance reporting requirements that apply to solo 401k plans which are different from IRAs.

    1. If you converted pretax solo 401k funds to the Roth IRA, then code G is the correct code.

    2. See page 5 (bottom numbers of the following IRS publication: which states the following:

    “For a direct rollover of an eligible rollover distribution to a
    Roth IRA (other than from a designated Roth account), report
    the total amount rolled over in box 1, the taxable amount in
    box 2a, and any basis recovery amount in box 5. (See the
    instructions for Box 5, later.) Use Code G in box 7.

    3. The IRS knows the conversion of pretax solo 401k funds to a Roth IRA is taxable by referring to box 2a. “taxable amount” NOT just by the code listed in box 7.

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