Ask Ed Slott: Explaining the Step Transaction Doctrine

[krjones]

I am looking for a better understanding of the basis rules for transfers from a 401K Roth account to a Roth IRA account. My company had a 401K Roth for about 3years until the entire plan was discontinued and the Roth 401K was then transferred to a Roth IRA - do I need to figure out my actual contributions to the Roth 401K for basis purposes and can this amount be withdrawn anytime vs waiting the 5 years since the start of the Roth IRA ? Also, my wife has a 401K Roth account which we have quit contributing to. If her plan allows in service withdrawals, is it better to wait until the Roth 401K has been in existence for 5 years, before transferring to a Roth IRA ?