2010 conversion – opted to split 2011/12 – able to change?
Client converted in 2010, expected to claim all income in 2010 and CPA filed 2010 taxes, opted to split income in 2011 and 2012. Can client amend their 2010 return by October 17th to claim the income in 2010 instead? Where can I find the information in the IRS publication – looked at the instructions for the 8606 and page 7 states “You cannot change your treatment of the conversion after the due date (including extenstions) for your tax return.” I am told the EA blog is confirming you can amend up until October 17th. Thanks in advance.
Permalink Submitted by Alan Spross on Fri, 2011-08-26 18:26
Yes, an amended return filed by 10/17 can include a revised 8606 where the box is checked to opt out of the two year deferral and report the entire conversion in 2010. Of course, use of the Oct extended due date is contingent on client having filed either an extension OR the original return by 4/18.
If the value of the conversion has dropped enough, client could also recharacterize all or part of it by 10/17 and include that on the amended return instead of just changing the income year.