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    Strych9's Avatar
    Strych9 Posts: 2, Reputation: 1
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    #1

    Feb 7, 2008, 09:02 PM
    Taxes on 401K after-tax portion I rec'd of a rollover?
    Hi and thanks in advance for any possible info on this.
    I have some 401K funds that have been rolled into another more diversified retirement fund. I received a small portion that was "after-tax" in the form of a check and the rest of the "before -tax" into the new retirement account. I was told to just put the "after-tax" check in my savings account and that no taxes would have to be paid on it. Then, I get two 1099-R's... The larger, "before-tax" amount has a "G" in the Distribution Code box... the "after-tax" one has a "1" in the box. According to what I've read in TaxCut and in this forum, I've got to pay taxes AND a penaly for the "after-tax" amount I received. Is this right? It's from funds added after 1985 so it's sounding like penalties and taxes have to be paid on it. Or do I just file a Form-5329 to indicate that this is "not" a taxable amount as indicated in box 2a on the 1099-R?
    Strych9's Avatar
    Strych9 Posts: 2, Reputation: 1
    New Member
    		  
    #2

    Feb 7, 2008, 10:31 PM
    After some more research, I believe it's because these "after-tax" funds came from an Employee Stock Ownership Plan that I remember being discontinued and the funds moved to the 401K. I think I do have to file the 5329.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Feb 13, 2008, 10:38 AM
    Yes, file the Form 5329 if you determine that you meet the exception.
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