Excess Roth Contributions to Recharacterization to Conversion???
Riddle me this…
What if a person has excess contributions in a ROTH IRA and realizes it before year end. Can they complete a recharacterization of these contributions to a traditional IRA and then convert the IRA to the ROTH? This person has no IRA in place (only a 401k) so all the money placed in the IRA through the recharacterization would be after-tax money.
Thoughts?
Permalink Submitted by Alan - IRA critic on Mon, 2014-07-21 17:50
Yes, they could simply recharacterize the Roth contribution as a non deductible TIRA contribution, report it as non deductible on Form 8606 and convert the balance. However, some of the conversion will be taxable if there were earnings generated on this contribution while it was in the Roth IRA or in the TIRA after recharacterization and prior to conversion.