Recharacterization limits roth converstion for same year
If we recharacterize the Roth ira back to the trad ira by lets say dec. 10th 2008, can i send in a new coversion from the ira to the roth ira before the end of Dec 2008?
this way the client still gets to covert an amount from the Ira into the roth ira for the taxable year 2008. otherwise they lose the opportunity to convert any money over for 2008. I hope you can understand what i am trying to say?
Doug
Permalink Submitted by Alan Spross on Tue, 2008-12-09 19:48
Doug,
Yes, another conversion can be done as long as it is not a disallowed reconversion of the same funds that were converted before. If you want to recharacterize prior to the second conversion, send that recharacterization to a NEW TIRA account number, not back to the original TIRA. Then complete the second conversion from the original TIRA, and also use a different dollar amount than the first one.
This means that if the client did a total conversion of his TIRA, then he cannot convert again in 2008 and would have to wait 31 days after the recharacterization. But if he did a partial conversion and there is still some funds left in the first TIRA, then conversion of remaining funds is OK.