Roth Conversion Inquiry
Hello,
We have a client (age 67) that requested a Roth conversion on 12/29/2023 for $100K and due to the cash not being available (trades were pending) and the request was not escalated with our back office so the Roth conversion was not processed until 01/02/2024. The client wanted this to be processed in 2023 and reported in 2023.
Our back office is not willing to back date the transaction to 2023 per IRS rules which is understood. Do you have any suggestions that could be offered to the client at this point.
Any feedback would be greatly appreciated. Thank you.
Permalink Submitted by David Mertz on Fri, 2024-01-05 16:39
There is nothing that can be done to make this be 2023 income. It is irrevocably 2024 income.
Permalink Submitted by Alan - IRA critic on Fri, 2024-01-05 16:44
Only suggestion is not to delay important transactions like this or RMDs to the final week of the year. Client cannot voluntarily report this conversion on the 2023 return, and of course the 2024 conversion cannot be recharacterized. Client also needs to adjust 2024 withholding or estimates to address the higher 2024 tax liability.