New 2018 Roth Recharacterizations
Would a Roth conversion performed in 2017 still be eligible for re-characterization in 2018 in light of the new tax rules with respect to 2018 conversions?
Vanguard says they will allow it, as of now on their website – https://investornews.vanguard/vanguards-take-on-the-tax-bill/When would you expect IRS to clarify this for the public? -m
I would hope soon. Vanguard must be pretty sure of the IRS position to make this decision when others have not, but I think they are correct and probably have an inside contact with Congress or the IRS. But it would put many people at ease if the IRS published confirmation. I don’t know why they are dragging their feet on this since this question keeps coming up everywhere. On the outside chance that we get a surprise answer from the IRS, I wonder if VG will have to rescind the recharacterizations they have already processed. Any market meltdown now will certainly increase the recharacterization pressure on 2017 conversions.
Permalink Submitted by Alan - IRA critic on Wed, 2017-12-27 21:47
Still up for debate. The odds are that they will be eligible based on the conversions and any recharacterizations being for the 2017 tax year and coded as such on the 1099R. But there has been no official guidance from the IRS or tax writing committee, so we do not know for sure.