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The pro-rata rule comes into play when you have both pre-tax and after-tax dollars in your retirement accounts
When you take a distribution, a portion of your distribution will be taxable and a portion will be non-taxable as a result of the pro-rata rule
You can't arbitrarily designate certain funds as taxable or not taxable, you have to follow the rule
Following the rule can be explained here: http://www.retirementctr.com/edslott.php?theentry=860
Unfortunately, qualified retirement plans would follow the same pro-rata rule and you would need to calculate the portion of your distribution to the Roth that was pre-tax and after tax to determine how much tax you pay on the rollover
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