Another roth recharacterization question
In tax year 2007, I had to recharacterize a roth ira contribution to a traditional ira. The recharacterization happened in January 2008. Now my broker lists the conversion as a contribution to my traditional ira account for the tax year 2008. Is this correct? Does a 2007 conversion, applied in early 2008, count as a contribution for tax year 2008?
Permalink Submitted by Alan Spross on Wed, 2008-12-31 22:25
No.
You are probably looking at a broker statement, and it is OK if it shows as a contribution as long as it is not showing as a regular contribution, but a recharacterization. You will also get a 5498 showing a recharacterization contribution to your TIRA and a 1099R showing a distribution from the Roth IRA. This does not affect your ability to make a regular IRA contribution if you wish.
You should have already reported the conversion and recharacterization on your 2007 return with an explanatory statement that the IRS requests to help them track the activity. If so, this recharacterization should not affect your 2008 tax return at all because all of this was reported on your 2007 return.
Permalink Submitted by John Jones on Wed, 2008-12-31 23:03
Thank you for your assistance.
I did report the conversion in my 2007 tax returns.
The 5498 form does not show a recharacterization contribution to my TIRA. The box 4 line item, “Recharacterized Contributions” is set to 0. I presume that it should be set to the recharacterized amount?
Permalink Submitted by Alan Spross on Wed, 2008-12-31 23:38
What year shows on the 5498? The 2008 year is not normally out yet. Are you sure this is not a 2007 5498? Also, be sure the 5498 you are looking at is for the TIRA and not the Roth IRA.
Permalink Submitted by John Jones on Fri, 2009-01-02 04:45
Yes, this was for the 2007 5498. That would explain the absence of the recharacterization numbers.
Thanks again….