I have two traditional IRAs:

  1. a rollover from a past 401(k), with no basis (all pretax contributions)
  2. an IRA with only after-tax contributions, with high basis

If I do a Roth conversion, as far as I know I have to treat these as one big bucket. I can't convert only the high-basis IRA to Roth. If I converted half the money to Roth then I could only use up half the basis.

However, I could roll the first IRA into my current employer's 401(k).

If I did that, does all of the basis stay "outside" the 401k, such that I could Roth-convert the remaining IRA and use all the basis?

Or would I have to do something like transfer part of the basis to the 401k?

(I'll ask an accountant as well before doing this, but curious if anyone has already figured it out.)

2 Answers 2


Yes, it can be done. See "Scenario 4" at Isolating 401(k) basis - Fairmark.com. Though that article is primarily about getting after-tax 401(k) money into a Roth IRA, Scenario 4 applies to the scenario you are asking about.

At a high level you do exactly what you say -- transfer the pre-tax money from your trad IRAs to a 401(k) (btw, a solo 401(k) will work for this also -- doesn't have to be your employer's -- but then you need to be eligible to set up a solo 401(k)). This is allowed because qualified plans can't accept after after-tax traditional IRA money, so the transfer overrides the usual pro rata rules and "strains" the basis out and leaves it in the trad IRA.

However, there's a mismatch between the intent of Congress (as indicated by the Joint Committee on Taxation report on the law) and the actual text of the law as detailed in the Fairmark article which while it doesn't stop you from doing this adds a couple of hoops to jump through if you want to be in total compliance with the law.


Yes, that's exactly what you can/should do. The only question is whether the 401(k) has good investment choices and low fees, if so, go for it.

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