qbteachmt
Level 15

I'm going to ask for some clarification:

"to his personal Vanguard account."

Which type of account is that? Roth IRA? Brokerage? Trad IRA? Commingled into what?

"Vanguard offers to transfer the post-tax balance into a Roth."

Only the amount that was from employee elective deferrals, then? Not including any earnings?

"for $100,000 which included $25,000 reflecting his normal yearly distribution"

The 1099-R broke it out into two parts?

The 1099-R is for money Out. There is no correction issued just because of whatever happened to the money afterwards. It's a normal distribution, and then any number of things are done with the funds, after being released.

"the $75,000 not included as a taxable distribution"

That code 7 is not the final status. It's the initial status, such as "no know exception applies" doesn't mean there is no exception. It just isn't known to the 1099-R issuer.

I don't think 401(m) has a Designated Roth provision, otherwise code B (or H) might apply with that amount.

Pending the answers from above: "Years have gone by"

So, basis alone won't resolve your entries. It seems you are going to have a variety of Basis (since Vanguard is using an older account balance for the Roth part) to be nontaxable, taxable earnings from all of the contributions/match (pre-tax and post-tax) and some sort of nontaxable rollover. And typically, that basis would be considered for a pro-rata taxable rollover. I don't know if there is some specific condition that allows this Roth amount to be selective (not pro rated).

You either have some research to do or need a benefits manager to help with this.

 

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