Which funds are being reconverted?
I made a $30,000 Roth conversion (to Roth IRA account A) in June 2014 and transferred the entire amount tp another IRA (Account B) with the same custodian in March 2015. In June 2015 I made another Roth conversion of $60,000 to account A. In September 2015 I then reconverted $30,00 back to the traditional IRA. Is the reconversion assumed to relate to the 2015 funds since the 2014 funds had been moved to another Roth IRA or is it associated with the 2014 funds since those funds had been originally placed into the account (although they had been transferred out in their entirety?
Permalink Submitted by Alan - IRA critic on Thu, 2016-01-28 17:38
What you describe as a reconversion is actually a recharacterization of a prior conversion. When you requested the Sept 2015 recharacterization you had to specify the date and amount of the conversion you wanted recharacterized. The Roth custodian must then determine the earnings or loss in the Roth while the Roth held that particular conversion. Sometimes transfers like the one you made in March 2015 create problems with the recharacterization calculation. Did you ask to recharacterize your 2014 conversion (reported on 2014 taxes) or your 2015 conversion? You may have a 1099R now for the recharacterization. If so, what code is in Box 7?