qbteachmt
Level 15

"My position is that the funds came from 100% pre tax 401k and the source for the back door IRA came from pre tax, therefore is taxable"

But that's not what you stated. Let's separate out the two types of Plans:

Employer and Individual

For Employer Pan: You stated there was the Reverse Rollover. As long as all Trad IRA money is now in the Employer 401(k), and none went into Roth 401(k), there is no conversion and no taxable event; and now, the person has no tax deferred amounts in Trad IRA, SIMPLE IRA or SEP.

For Individual: Now that there is nothing tax deferred outside of the Employer plan, they put a nondeductible contribution into Trad IRA and immediately rolled it to Roth IRA. That is Backdoor Roth, and since there is only Basis, there is no taxable event.

"The IRA is non deductible due to the high income of the client (IRA limitations). The source of the IRA came from all pre tax 401k."

The way you stated it, you have two different events.

"The fact that there is no IRAs does not tell the whole story here since the source was 401k to IRA to 401K."

That is the First part = Employer. There is nothing taxable about that part.

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