Roth conversion and then death
Wife converted traditional IRA to Roth IRA in early 2010 and elected to pay tax in both 2011 and 2012. She died in late 2010. Husband inherited Roth. How do the taxes get paid? Can he recharacterize the Roth back to a Tradiitonal and not pay the tax now if he wants to? As always, you folks rock – thank you!
Permalink Submitted by Alan Spross on Wed, 2012-02-29 20:02
The surviving spouse could have recharacterized the conversion, but the deadline for that was 10/17/2011. If there is sufficient benefit for a recharacterization, he might consider applying to the IRS for a letter ruling allowing him to be accorded an extension of that extended due date.
Otherwise, as the sole beneficiary he can continue to report the conversion in 2011 and 2012 on his single status tax returns, as was intended when the 2010 return was filed if the Form 8606 with that return elected the two year deferral.