Lets say for example I have $200,000 in my 401k. $50,000 of it being after tax contributions.
According to my research, in order to roll it to a traditional IRA and a Roth IRA I would need to get a check from my previous employer for the $200,000 (less 20% withholding on the $150,000), and then do an indirect rollover to the Traditional IRA FIRST for $150,000. Then write the check for $50,000 to the Roth IRA SECOND. I would have to come up with the withheld amount and get it back when I file my tax return. This is done to avoid the prorata rules of the after tax amount and to get "clean" IRAs, free of before/after tax mingling and the perpetual form 8606 that comes with it.
Has anyone done this? It seems like contradictory information surrounds this issue and the IRS has not clarified things.
According to my research, in order to roll it to a traditional IRA and a Roth IRA I would need to get a check from my previous employer for the $200,000 (less 20% withholding on the $150,000), and then do an indirect rollover to the Traditional IRA FIRST for $150,000. Then write the check for $50,000 to the Roth IRA SECOND. I would have to come up with the withheld amount and get it back when I file my tax return. This is done to avoid the prorata rules of the after tax amount and to get "clean" IRAs, free of before/after tax mingling and the perpetual form 8606 that comes with it.
Has anyone done this? It seems like contradictory information surrounds this issue and the IRS has not clarified things.