Recharacterizing a Traditional IRA contribution?
We have a client who made a 5k contribution to her traditional IRA in 2009, can she recharacterize this to a Roth contribution? If yes, what is the deadline?
We have a client who made a 5k contribution to her traditional IRA in 2009, can she recharacterize this to a Roth contribution? If yes, what is the deadline?
Permalink Submitted by Alan Spross on Thu, 2010-02-11 18:08
Yes, she can ask the IRA custodian to recharacterize it to a Roth contribution, but should be sure she qualifies for a full Roth regular contribution before doing so. The deadline is the extended due date. That date is 10/15/2010 providing she either files her 2009 return by 4/15 OR files a timely extension request.
In the recharacterized contribution earnings or losses are reflected in the amount that migrates to the Roth IRA. If she proceeds with this, the IRS requests an explanatory statement be included with her 2009 return stating what she has done, and of course she would not file an 8606 OR deduct the TIRA contribution on that return.