Reconvert
The rules say that if you convert and then re-characterize, you cannot reconvert those same funds until the year after the year of the conversion or more than 30 days from the re-characterization, whichever is later. This rule can be complicated!
6-2015 Converted a % of my traditional IRA to Roth
3-2016 Re-characterized a portion of that conversion
4-2016 Can reconvert due to 30 day rule
6-2016 Can reconvert due to a year after the conversion
I am able to reconvert after 6-2016 because a year after the conversion is longer. Is that correct?
In addition, because I converted only a % of my traditional IRA does that allow me to do conversions prior to 6-2016 on the remaining % not part of the original conversion?
I hope this make sense
Thanks
Permalink Submitted by Alan - IRA critic on Fri, 2016-02-26 04:06
The waiting period is the longer of the beginning of the next calendar year or 30 days from the recharacterization. SInce this was a 2015 conversion, you can reconvert the same assets after 30 days from the recharacterization which would be sometime in April. No need to wait until June. You can also convert different assets anytime, but in order to be able to easily demonstrate to the IRS that the converted assets are different, you might have recharacterized to a new TIRA account. That way when you convert more assets from the original TIRA, they could not have been recharacterized assets since those are sitting in a different TIRA account. Still, I would not worry much about converting more from the current TIRA if that IRA balance at all times is considerably more than the amount you recharacterized back there. The IRS rarely asks for documentation regarding disallowed reconversions. They get a 5498 showing the year end value of each TIRA account, so if that value is considerably higher than the recharacterization 1099R they are not going to give this a second thought.