Rollover from 401K to Traditional IRA

Unknown

I rolled over a 401K to a tradition IRA account (check sent from 401K manager directly to IRA manager.
When I enter a Sold transaction in the 401K account and a Bought transaction in the new IRA my Cost Basis changes as if I actually received cash and used that cash to buy shares.
How do I enter the transaction without affecting my Cost Basis?

NotACPA

You don't.  You DID sell shares ("check sent" ... that check/cash had to have come from somewhere).

Your cost basis DOES change, as you've described the scenario.  That you never had your hands on the check is immaterial ... as your agents (the 401k trustee and the IRA trustee) DID have the cash.

Rocket J Squirrel

NotACPA - QW HBRP 2019 said:

You don't.  You DID sell shares ("check sent" ... that check/cash had to have come from somewhere).

Your cost basis DOES change, as you've described the scenario.  That you never had your hands on the check is immaterial ... as your agents (the 401k trustee and the IRA trustee) DID have the cash.

The good news is that cost basis doesn't matter inside a tax-deferred account. All that matters at tax time is the amount withdrawn when a distribution is taken.

NotACPA

NotACPA - QW HBRP 2019 said:

You don't.  You DID sell shares ("check sent" ... that check/cash had to have come from somewhere).

Your cost basis DOES change, as you've described the scenario.  That you never had your hands on the check is immaterial ... as your agents (the 401k trustee and the IRA trustee) DID have the cash.

It matters for performance reporting ... just not for tax purposes.

Jim_Harman

If you want to see the combined performance of the 401k and the rollover IRA, make a customized Investment Performance report that includes just those two accounts.