roth recharacterization
Regular IRA was converted to a Roth IRA using the four year spread beginning in 1998. Can all or any of the converted amount be recharacterized to the regular IRA & a refund of the tax paid in 1998 – 2001 be obtained?
Regular IRA was converted to a Roth IRA using the four year spread beginning in 1998. Can all or any of the converted amount be recharacterized to the regular IRA & a refund of the tax paid in 1998 – 2001 be obtained?
Permalink Submitted by Alan Spross on Mon, 2008-02-04 18:02
No, the recharacterization deadline for the 1998 conversions was no different than what it is today, the extended due date for the tax return for the conversion year. For 1998 conversions, that would have been 10/15/99.
If your inquiry results from a large investment loss, there is an option to close all Roth IRA accounts and take a miscellaneous itemized tax deduction for the shortfall between the amount received and the amounts contributed both from regular and conversion contributions. The taxpayer must be able to itemize and the 2% of AGI limit applies to the deduction. Also, this deduction is disallowed under AMT.