I have two traditional IRAs:
- a rollover from a past 401(k), with no basis (all pretax contributions)
- 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.)