re-characterization of Roth IRA (from 401k)
An account holder converts a 401(k) plan to a Roth IRA upon separation of service in 2008. Can he recharacterize the Roth IRA to an IRA, since the funds did not come from an IRA to begin with? He obviously can’t put the money back into the 401(k) plan.
Permalink Submitted by Alan Spross on Tue, 2009-07-14 00:41
Yes, a TIRA must be established to receive the full or partial recharacterization. If any portion of the direct Roth conversion was from after tax contributions, then an 8606 will eventually need to be filed for the TIRA to prevent loss of basis.