Recharacterization and Reconversion
Hi!
I had converted from my Rollover IRA to Roth IRA in 2010.
Got a 2010 1099-R from Vanguard with Box 1 = $3,800, Box 2a = $3,800, Box 2b = checked, Box 4 = $0, Box 7 = 02, IRA/SEP/Simple = checked
In 2010, chose to pay taxes in 2011 and 2012
Now in Oct 2011, recharacterized the full amount. Received back $3,400 in the Rollover IRA. In Dec 2011, reconverted $3,700 from Rollover to Roth.
Got 2 2011 1099-Rs from Vanguard
One for the recharacterization: Box 1 = $3,400, Box 2a = $0, Box 4 = $0, Box 7 = R
One for the reconversion: Box 1 = $3,700, Box 2a = $0, Box 4 = $0, Box 7 = N, IRA/SEP/Simple = checked
My questions are about the last 1099-R for the reconversion.
1. I believe Box 7 in it should not be marked as N as that stands for recharacterization in 2011 (correct?).
2. Shouldn’t this 1099-R have been just like the 2010 1099-R with Box 1= Box 2a = $3,700, Box 2b = checked, Box 7 = 02 and IRA/SEP/Simple = checked?
3. How much amount should appear taxable on line 15b on my 2011 1040 returns? I believe it should be $3,700. Is that right?
4. Should I be asking for a corrected 1099-R from Vanguard?
Thanks in advance for this last minute help!
Permalink Submitted by Jai Nayak on Sun, 2012-04-15 23:40
I want to add that I did submit the recharacterization to the IRS before the Oct 2011 deadline.
Permalink Submitted by Alan Spross on Mon, 2012-04-16 01:56
You are correct, and the 1099R needs to be reissued by VG.
The corrected one should be coded like your earlier conversion, ie Code 2 in Box 7. Taxable amount for the latest conversion is 3,700.
You can file your 2011 return assuming the corrected 1099R will be issued, but follow up to see that it is.
Permalink Submitted by Jai Nayak on Mon, 2012-04-16 03:06
Thank you so much, Alan! I really appreciate your quick reply.