Roth Recharacterization
Do you amend the tax return of the year you converted to the Roth (so as to look as if nothing transferred); or, do you take a deduction for the year of the recharacterization to show you had the Roth but decided it was not a good idea to pay the tax on the IRA and wanted to put it back to its original state?
Permalink Submitted by Alan Spross on Wed, 2011-12-28 22:28
If you filed the return for the year of the conversion, then you will have to amend that return on a 1040X, and get a tax refund from the IRS. If the only reason you filed an 8606 with that return was the conversion and you recharacterized the entire conversion amount, then the 1040X explanation should state that the 8606 reporting the conversion is deleted and you should also include an explanatory statement showing the dates and amounts of the conversion and the dates and amounts of the recharacterization.
There is no deduction taken on the following return.