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Question about かな　and だろう

401(k) cost basis

Moving money between Roth IRA and employer's 401(k)Cost basis allocation question: GM bonds conversion to stock & warrantsCould excess 401(k) contributions be used to game/maximize matches from different employers?401(k) Investment stategiesAre there any circumstances in which unvested employer 401(k) contributions revert to the employee?1099-B, box 5, how to figure out cost basis?How can I protect my 401(k) when the stock market is performing badly?Keeping track of “out of pocket” cost basisIf your 401(k) doesn't match contributions, should you max out your IRA contributions before contributing to it?Broker got basis wrong on 1099B

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10

My first 401(k) started in the early 1990s with some employer matching funds. Since then, there have rollovers, more 401(k)s, and lost records. Aside from a really rough estimate, what happens when the 401(k) cost basis is unknown?

united-states 401k cost-basis

share|improve this question

edited Apr 24 at 14:22

Nathan L

30.3k1675132

asked Apr 24 at 3:42

CWallachCWallach

864

• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  What about Pennsylvania ? fool.com/knowledge-center/… Pennsylvania typically doesn't allow you to exclude your 401(k) contributions from your state taxable income in the year you make them
  
  – Neil
  2 days ago
  

  
  
  
  

add a comment | 

10

My first 401(k) started in the early 1990s with some employer matching funds. Since then, there have rollovers, more 401(k)s, and lost records. Aside from a really rough estimate, what happens when the 401(k) cost basis is unknown?

united-states 401k cost-basis

share|improve this question

edited Apr 24 at 14:22

Nathan L

30.3k1675132

asked Apr 24 at 3:42

CWallachCWallach

864

• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  What about Pennsylvania ? fool.com/knowledge-center/… Pennsylvania typically doesn't allow you to exclude your 401(k) contributions from your state taxable income in the year you make them
  
  – Neil
  2 days ago
  

  
  
  
  

add a comment | 

My first 401(k) started in the early 1990s with some employer matching funds. Since then, there have rollovers, more 401(k)s, and lost records. Aside from a really rough estimate, what happens when the 401(k) cost basis is unknown?

united-states 401k cost-basis

share|improve this question

edited Apr 24 at 14:22

Nathan L

30.3k1675132

asked Apr 24 at 3:42

CWallachCWallach

864

share|improve this question

edited Apr 24 at 14:22

Nathan L

30.3k1675132

asked Apr 24 at 3:42

CWallachCWallach

864

share|improve this question

edited Apr 24 at 14:22

Nathan L

30.3k1675132

asked Apr 24 at 3:42

CWallachCWallach

864

edited Apr 24 at 14:22

Nathan L

30.3k1675132

edited Apr 24 at 14:22

Nathan L

30.3k1675132

asked Apr 24 at 3:42

CWallachCWallach

864

asked Apr 24 at 3:42

CWallachCWallach

864

3 Answers
3

active

oldest

votes

11

Unless you made after tax contributions your basis is zero and all distributions are taxable income. If the cost basis is unknown it would be treated as if it were zero. Relatively few 401(k) plans allow after tax contributions and its likely that you would know if you had made them.

I’m referring to after tax contributions to a traditional 401(k) plan not designated Roth contributions. After tax contributions are allowed and would mean the earnings on those contributions would be taxable as ordinary income when withdrawn but the original contribution would not be.

share|improve this answer

edited Apr 24 at 11:44

JoeTaxpayer♦

148k23238478

answered Apr 24 at 8:04

T. M.T. M.

1,198211

• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  After tax contributions can be rolled into a Roth IRA when you switch jobs or retire.
  
  – Nathan L
  Apr 24 at 15:04
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  @NathanL Yes, or when withdrawn as an in-service withdrawal if the plan allows those as well, but that wasn't what the question was about so I didn't mention that. Also certain merger/buyout situations can trigger the ability to rollover 401(k) balances.
  
  – T. M.
  Apr 24 at 19:05
  

  
  
  
  

add a comment | 

6

Cost basis doesn't matter because all distributions are:

• taxable in traditional retirement accounts.


• non-taxable in roth accounts.

Contributions are relevant to roth accounts because you can take those back within certain parameters without any penalty.

share|improve this answer

answered Apr 24 at 4:43

quidquid

39.7k877129

• 
  
  
  

  
  3
  

  
  
  
  
  
  

  
  
  That’s not true if there were after tax contributions.
  
  – T. M.
  Apr 24 at 8:05
  

  
  
  
  


• 
  
  
  

  
  3
  

  
  
  
  
  
  

  
  
  @T.M. I don't understand your comment here. After-tax contributions to a 401(k) are usually to a Roth 401(k) are you referring to something else?
  
  – Nathan L
  Apr 24 at 14:21
  

  
  
  
  


• 
  
  
  

  
  2
  

  
  
  
  
  
  

  
  
  @NathanL: Yes, there's a third type of 401(k) which is an after-tax (contributions beyond the now-19k annual limit).
  
  – Ben Voigt
  Apr 24 at 14:38
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  @BenVoigt wouldn't most people just roll those to a Roth IRA when they retire or switch jobs?
  
  – Nathan L
  Apr 24 at 14:47
  
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  @NathanL: Mostly correct. The cost basis matters at the moment of rollover because it determines how much of the after-tax account rolls to traditional IRA and how much to Roth IRA.
  
  – Ben Voigt
  Apr 24 at 15:19
  

  
  
  
  

add a comment | 

3

A 401(k) plan is a qualified retirement plan. This means that as long as you follow all the rules and only roll funds to other qualified retirement plans, you don't need to worry about the cost basis of any purchases, because you won't pay any taxes on any of the investments (capital gains, etc.) while your money remains in those qualified plans.

As quid mentioned earlier, you will only pay taxes (depending on the type of plan) when the funds are withdrawn, not when individual investments are bought or sold. (Nor when dividends are paid.)

The special rules that you want to pay attention to with these qualified plans are related to contribution limits, rollovers, and especially withdrawals. Those rules are amply covered in other answers here, but you should become familiar with the advantages and disadvantages of each type of plan.

share|improve this answer

answered Apr 24 at 14:33

Nathan LNathan L

30.3k1675132

• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  "As quid mentioned earlier, you will only pay taxes (depending on the type of plan) when the funds are withdrawn" - and do you need the cost basis at that time, or is it not used in the calculation?
  
  – Don Branson
  2 days ago
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  @DonBranson cost basis is the wrong term here, but generally no. If it's in a traditional account (pre-tax contributions) then you will pay tax when you withdraw because that's money you were never taxed on. In Roth accounts, you paid in post-tax, and the original contributions are available in a variety of circumstances, and the gains are available tax free at retirement time.
  
  – Nathan L
  2 days ago
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  Thanks. :) That helps clarify.
  
  – Don Branson
  2 days ago
  

  
  
  
  

add a comment | 

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11

Unless you made after tax contributions your basis is zero and all distributions are taxable income. If the cost basis is unknown it would be treated as if it were zero. Relatively few 401(k) plans allow after tax contributions and its likely that you would know if you had made them.

I’m referring to after tax contributions to a traditional 401(k) plan not designated Roth contributions. After tax contributions are allowed and would mean the earnings on those contributions would be taxable as ordinary income when withdrawn but the original contribution would not be.

share|improve this answer

edited Apr 24 at 11:44

JoeTaxpayer♦

148k23238478

answered Apr 24 at 8:04

T. M.T. M.

1,198211

• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  After tax contributions can be rolled into a Roth IRA when you switch jobs or retire.
  
  – Nathan L
  Apr 24 at 15:04
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  @NathanL Yes, or when withdrawn as an in-service withdrawal if the plan allows those as well, but that wasn't what the question was about so I didn't mention that. Also certain merger/buyout situations can trigger the ability to rollover 401(k) balances.
  
  – T. M.
  Apr 24 at 19:05
  

  
  
  
  

add a comment | 

11

Unless you made after tax contributions your basis is zero and all distributions are taxable income. If the cost basis is unknown it would be treated as if it were zero. Relatively few 401(k) plans allow after tax contributions and its likely that you would know if you had made them.

I’m referring to after tax contributions to a traditional 401(k) plan not designated Roth contributions. After tax contributions are allowed and would mean the earnings on those contributions would be taxable as ordinary income when withdrawn but the original contribution would not be.

share|improve this answer

edited Apr 24 at 11:44

JoeTaxpayer♦

148k23238478

answered Apr 24 at 8:04

T. M.T. M.

1,198211

• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  After tax contributions can be rolled into a Roth IRA when you switch jobs or retire.
  
  – Nathan L
  Apr 24 at 15:04
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  @NathanL Yes, or when withdrawn as an in-service withdrawal if the plan allows those as well, but that wasn't what the question was about so I didn't mention that. Also certain merger/buyout situations can trigger the ability to rollover 401(k) balances.
  
  – T. M.
  Apr 24 at 19:05
  

  
  
  
  

add a comment | 

Unless you made after tax contributions your basis is zero and all distributions are taxable income. If the cost basis is unknown it would be treated as if it were zero. Relatively few 401(k) plans allow after tax contributions and its likely that you would know if you had made them.

I’m referring to after tax contributions to a traditional 401(k) plan not designated Roth contributions. After tax contributions are allowed and would mean the earnings on those contributions would be taxable as ordinary income when withdrawn but the original contribution would not be.

share|improve this answer

edited Apr 24 at 11:44

JoeTaxpayer♦

148k23238478

answered Apr 24 at 8:04

T. M.T. M.

1,198211

share|improve this answer

edited Apr 24 at 11:44

JoeTaxpayer♦

148k23238478

answered Apr 24 at 8:04

T. M.T. M.

1,198211

edited Apr 24 at 11:44

JoeTaxpayer♦

148k23238478

edited Apr 24 at 11:44

JoeTaxpayer♦

148k23238478

answered Apr 24 at 8:04

T. M.T. M.

1,198211

answered Apr 24 at 8:04

T. M.T. M.

1,198211

6

Cost basis doesn't matter because all distributions are:

• taxable in traditional retirement accounts.


• non-taxable in roth accounts.

Contributions are relevant to roth accounts because you can take those back within certain parameters without any penalty.

share|improve this answer

answered Apr 24 at 4:43

quidquid

39.7k877129

• 
  
  
  

  
  3
  

  
  
  
  
  
  

  
  
  That’s not true if there were after tax contributions.
  
  – T. M.
  Apr 24 at 8:05
  

  
  
  
  


• 
  
  
  

  
  3
  

  
  
  
  
  
  

  
  
  @T.M. I don't understand your comment here. After-tax contributions to a 401(k) are usually to a Roth 401(k) are you referring to something else?
  
  – Nathan L
  Apr 24 at 14:21
  

  
  
  
  


• 
  
  
  

  
  2
  

  
  
  
  
  
  

  
  
  @NathanL: Yes, there's a third type of 401(k) which is an after-tax (contributions beyond the now-19k annual limit).
  
  – Ben Voigt
  Apr 24 at 14:38
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  @BenVoigt wouldn't most people just roll those to a Roth IRA when they retire or switch jobs?
  
  – Nathan L
  Apr 24 at 14:47
  
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  @NathanL: Mostly correct. The cost basis matters at the moment of rollover because it determines how much of the after-tax account rolls to traditional IRA and how much to Roth IRA.
  
  – Ben Voigt
  Apr 24 at 15:19
  

  
  
  
  

add a comment | 

6

Cost basis doesn't matter because all distributions are:

• taxable in traditional retirement accounts.


• non-taxable in roth accounts.

Contributions are relevant to roth accounts because you can take those back within certain parameters without any penalty.

share|improve this answer

answered Apr 24 at 4:43

quidquid

39.7k877129

• 
  
  
  

  
  3
  

  
  
  
  
  
  

  
  
  That’s not true if there were after tax contributions.
  
  – T. M.
  Apr 24 at 8:05
  

  
  
  
  


• 
  
  
  

  
  3
  

  
  
  
  
  
  

  
  
  @T.M. I don't understand your comment here. After-tax contributions to a 401(k) are usually to a Roth 401(k) are you referring to something else?
  
  – Nathan L
  Apr 24 at 14:21
  

  
  
  
  


• 
  
  
  

  
  2
  

  
  
  
  
  
  

  
  
  @NathanL: Yes, there's a third type of 401(k) which is an after-tax (contributions beyond the now-19k annual limit).
  
  – Ben Voigt
  Apr 24 at 14:38
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  @BenVoigt wouldn't most people just roll those to a Roth IRA when they retire or switch jobs?
  
  – Nathan L
  Apr 24 at 14:47
  
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  @NathanL: Mostly correct. The cost basis matters at the moment of rollover because it determines how much of the after-tax account rolls to traditional IRA and how much to Roth IRA.
  
  – Ben Voigt
  Apr 24 at 15:19
  

  
  
  
  

add a comment | 

Cost basis doesn't matter because all distributions are:

• taxable in traditional retirement accounts.


• non-taxable in roth accounts.

Contributions are relevant to roth accounts because you can take those back within certain parameters without any penalty.

share|improve this answer

answered Apr 24 at 4:43

quidquid

39.7k877129

share|improve this answer

answered Apr 24 at 4:43

quidquid

39.7k877129

answered Apr 24 at 4:43

quidquid

39.7k877129

answered Apr 24 at 4:43

quidquid

39.7k877129

3

A 401(k) plan is a qualified retirement plan. This means that as long as you follow all the rules and only roll funds to other qualified retirement plans, you don't need to worry about the cost basis of any purchases, because you won't pay any taxes on any of the investments (capital gains, etc.) while your money remains in those qualified plans.

As quid mentioned earlier, you will only pay taxes (depending on the type of plan) when the funds are withdrawn, not when individual investments are bought or sold. (Nor when dividends are paid.)

The special rules that you want to pay attention to with these qualified plans are related to contribution limits, rollovers, and especially withdrawals. Those rules are amply covered in other answers here, but you should become familiar with the advantages and disadvantages of each type of plan.

share|improve this answer

answered Apr 24 at 14:33

Nathan LNathan L

30.3k1675132

• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  "As quid mentioned earlier, you will only pay taxes (depending on the type of plan) when the funds are withdrawn" - and do you need the cost basis at that time, or is it not used in the calculation?
  
  – Don Branson
  2 days ago
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  @DonBranson cost basis is the wrong term here, but generally no. If it's in a traditional account (pre-tax contributions) then you will pay tax when you withdraw because that's money you were never taxed on. In Roth accounts, you paid in post-tax, and the original contributions are available in a variety of circumstances, and the gains are available tax free at retirement time.
  
  – Nathan L
  2 days ago
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  Thanks. :) That helps clarify.
  
  – Don Branson
  2 days ago
  

  
  
  
  

add a comment | 

3

A 401(k) plan is a qualified retirement plan. This means that as long as you follow all the rules and only roll funds to other qualified retirement plans, you don't need to worry about the cost basis of any purchases, because you won't pay any taxes on any of the investments (capital gains, etc.) while your money remains in those qualified plans.

As quid mentioned earlier, you will only pay taxes (depending on the type of plan) when the funds are withdrawn, not when individual investments are bought or sold. (Nor when dividends are paid.)

The special rules that you want to pay attention to with these qualified plans are related to contribution limits, rollovers, and especially withdrawals. Those rules are amply covered in other answers here, but you should become familiar with the advantages and disadvantages of each type of plan.

share|improve this answer

answered Apr 24 at 14:33

Nathan LNathan L

30.3k1675132

• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  "As quid mentioned earlier, you will only pay taxes (depending on the type of plan) when the funds are withdrawn" - and do you need the cost basis at that time, or is it not used in the calculation?
  
  – Don Branson
  2 days ago
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  @DonBranson cost basis is the wrong term here, but generally no. If it's in a traditional account (pre-tax contributions) then you will pay tax when you withdraw because that's money you were never taxed on. In Roth accounts, you paid in post-tax, and the original contributions are available in a variety of circumstances, and the gains are available tax free at retirement time.
  
  – Nathan L
  2 days ago
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  Thanks. :) That helps clarify.
  
  – Don Branson
  2 days ago
  

  
  
  
  

add a comment | 

A 401(k) plan is a qualified retirement plan. This means that as long as you follow all the rules and only roll funds to other qualified retirement plans, you don't need to worry about the cost basis of any purchases, because you won't pay any taxes on any of the investments (capital gains, etc.) while your money remains in those qualified plans.

As quid mentioned earlier, you will only pay taxes (depending on the type of plan) when the funds are withdrawn, not when individual investments are bought or sold. (Nor when dividends are paid.)

The special rules that you want to pay attention to with these qualified plans are related to contribution limits, rollovers, and especially withdrawals. Those rules are amply covered in other answers here, but you should become familiar with the advantages and disadvantages of each type of plan.

share|improve this answer

answered Apr 24 at 14:33

Nathan LNathan L

30.3k1675132

share|improve this answer

answered Apr 24 at 14:33

Nathan LNathan L

30.3k1675132

answered Apr 24 at 14:33

Nathan LNathan L

30.3k1675132

answered Apr 24 at 14:33

Nathan LNathan L

30.3k1675132