Amended election to spread conversion tax over two years
Is it possible to amend a 2010 tax return (which was originally filed with taxpayer electing to spread the tax on Roth IRA conversion over two years) so that the taxpayer in essence rescinds the election and pays the tax on their amended 2010 1040 instead.
I understand that there would be penalties and interest, but it may still make sense for client of mine who had much more taxable income in 2011 than originally planned and expects to in 2012 as well.
If possible it would be helpful to cite regs or code that allows this (or does not for that matter).
Thanks as always.
Howard
Permalink Submitted by Alan Spross on Wed, 2012-03-21 03:28
Unfortuneately, the option to change the election regarding 2010 conversion income was 10/17/2011. The IRS would have had to receive an amended 8606 form with a 1040X by that date in order to change the election. This is the same deadline date for recharacterizing a 2010 conversion or regular contribution assuming the taxpaye filed the 2010 return or an extension by 4/15/2011.
Otherwise the client will still have to report half the taxable conversion income in 2011 and the other half in 2012.
See the following Q and A from the IRS website:
http://www.irs.gov/retirement/article/0,,id=111413,00.html#2r
Permalink Submitted by Howard Hook on Wed, 2012-03-21 04:19
thanks alan as always
hope all is well.
Howard