Small credits to account after recharacterization
Following are two issues:
1- On April 29th I recharacterized a Roth IRA opened in
2012. I intended to open a new 2013 Roth IRA today, June 3rd at
that same brokerage firm. However before doing so, I noticed that there was a small
(less than $10) delayed money market credit posted to my recharacterized 2012 Roth
IRA on May 31st. Does this mean that I must begin a new 30 day waiting period before
opening a new 2013 Roth IRA?
2- On April 29th, I also recharacterized an IRA at another brokerage firm.
Fortunately, there was no delayed credit posted to that account.
In both cases at each respective brokerage firm, the recharacterized accounts (cash
and securities) were transferred back to their respective Traditional IRAs.
There were no tranfers between these separately held Traditional IRAs during this period of time.
If it turns out that I am required to begin a new 30 day waiting period before opening a new 2013 Roth IRA at the first brokerage firm, would it mean that I would also have to wait that same amount of time at the second brokerage firm even though there was no activity at that second firm since April 29th?
Thank you.
Permalink Submitted by Alan - IRA critic on Mon, 2013-06-03 16:43
Sounds like these were 2012 Roth conversions you recharacterized back to TIRAs, and you now wish to reconvert to Roth IRAs after the required waiting period. In the case of the $10, if that Roth held ONLY your conversion then the $10 also needs to be transferred to the TIRA to complete the recharacterization. If that Roth held other assets, perhaps the $10 should remain there. You should check with the custodian about this. If they agree that the $10 should be added to the recharacterization transfer, then you need to wait 30 days after that is completed before reconverting. You would not have to wait longer with the other custodian to reconvert because of the activity with the first custodian. Note that if you have other assets in your TIRA that were never converted in the first place, you could convert using those assets without any waiting period.