TIRA CONVERSION TO ROTH MISSED RECHARACTERIZATION DEADLINE
I have a client that made an IRA conversion in 2006. Later found out that she was not qualified. She has not recharacterized the contribution back to a TRADITIONAL nor was the amount included in her 2006 return as a withdrawal.
She would like to recharacterize it back to a traditional. Are there any exceptions to the rules to recharacterize back to traditional.
Permalink Submitted by Alan Spross on Tue, 2008-04-01 04:19
There are no exceptions to the extended due date deadline for recharacterizations. That date was 10/15/07.
She will have to amend her 2006 return to report the income on the conversion and also pay the excess contribution penalty of 6%. The failed conversion is treated as an excess regular contribution to the Roth IRA. The 6% excise tax was also incurred for 2007. The excess amount must be withdrawn prior to year end to avoid another 6% charge.