Are there any examples to help explain the rollover rules?
Yes, the following examples from the proposed regulations under Section 402A illustrate the rollover rules. Employee B receives a $14,000 eligible rollover distribution that is not a qualified distribution from Bs designated Roth account, consisting of $11,000 of investment in the contract and $3,000 of income. Within 60 days of receipt, Employee B rolls over $7,000 of the distribution into a Roth IRA. The $7,000 is deemed to consist of $3,000 of income and $4,000 of investment in the contract. Because the only portion of the distribution that could be includible in gross income (the income) is rolled over, none of the distribution is includible in Employee Bs gross income. Employee C receives a $12,000 distribution, which is a qualified distribution that is attributable to the employee being disabled, from Cs designated Roth account. Immediately prior to the distribution, the account consisted of $21,850 of investment in the contract (i.e., designated Roth contributions) and $1,150 of
