Late Filing/Late Payment – Recharacterization Possible?

Submitted by LateFiler on Sat, 2014-09-20 16:57

First of all, I should mention that I am in the process of performing an Offshore Voluntary Disclosure.

Consequently, I was surprised by an offshore capital gain in 2013. When I amend my 2013 tax return (which was filed before April 15, 2014), I assume that I will be considered “late filing” and “late payment”. Since I did not request an “extension”, I also assume that I did not file “timely”.

Question 1: Since my taxable income will now be increased, can I now (prior to October 15, 2014) validly recharacterize my 2013 Roth IRA conversion?

Question 2: Since I may not be able to file my amended return by October 15, 2014, will that affect my ability to validly recharacterize my 2013 Roth IRA conversion?

Any assistance most appreciated.

Thank you.



Submitted by Alan - IRA critic on Sat, 2014-09-20 18:24

  1. If you filed your return by 4/15, you are entitled to the “extended due date” of 10/15 to recharacterize any conversions or regular contributions for 2013. Same as if you had filed an extension request.
  2. You can do the recharacterization and it will be valid even if you do not file the 1040X on time. There is no requirement to file the 1040X any sooner than the usual deadline because you did a recharacterization. That said, if you delay too long, the IRS might contact you for taxes on the conversion. The 1099R issued for your recharacterization and coded to apply to the 2013 tax year will not be received by you or the IRA until late January, 2015. Therefore, the IRS will not know you recharacterized until they process the 1099R. When you amend your 2013 you should include an explanatory statement regarding the conversion and recharacterization in the space provided, so the IRS will know why you deleted the conversion from Form 8606.

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