Recharacterization required forms prior to year end
A client converted in Feb 2011 paid the taxes 4-15-12, now they recharacterize in July 2012, to retreive the conversion taxes they need to ammend their 2011 return. Because the 5498 will not be issed until Mar of 2013 by the financial institution, what supporting documents can the client use in order to ammend their returns immediately after the recharacterization?
Permalink Submitted by pete thompson on Mon, 2011-04-18 21:04
Our own people say you can use the account stmts to document the recharacterization for the ammended return. If any of you think differently let us know.
Permalink Submitted by Alan Spross on Mon, 2011-04-18 21:12
The IRS does not ask for supporting statements with the amended return, just the 1040X showing the conversion income eliminated with an explanation in the box provided indicating the date and amount of the conversion and the date and amount of the recharacterized amount and what the amount was that migrated back to the TIRA. If the recharacterization was for 100% of the conversion, this statement should so indicate.
It is up to the IRS to match the eventual 1099R and 5498 forms with the amended return. The only difference here is that they will have the amended return prior to receipt of the custodian issued forms. Client should obviously retain the IRA account statements showing the recharacterization just in case, but the IRS rarely asks for such documentation.