Recharacterizing Roth to 401(k)
In 2010 a 60-year old client, converted a 401k to Roth. Now he wants to recharacterize this conversion.
Our understanding is that is has to be recharacterized back to a traditional IRA.
The question is, (a) once back into the IRA, can it be rolled from the IRA into the 401(k) and
(b) would there be a deadline to get it back into the 401(k)?
Thank you.
Permalink Submitted by mk foss on Mon, 2011-09-26 17:53
You are correct the recharacterized funds must go to a traditional IRA. That traditional IRA can be rolled to the 401(k) plan if the plan accepts IRA rollovers. If there is basis in the traditional IRA, the basis cannot be rolled over. Once you’ve complied with the October 17 deadline for the recharacterization, there are no specific deadlines in connection with the proposed set of transactions. This presupposes that everything will be done by “transfers” instead of checks to the taxpayer or the fund.
Permalink Submitted by Mary Harris on Mon, 2011-09-26 18:08
Thank you so much – all good news!