Roth IRA recharacterization
Good Afternoon
I have what I hope is an easy question
FACTS
Roth IRA account owner determines he is ineligible to make a Roth IRA contribution for tax year 2012 due to income
He recharacterizes account (including earnings) to a T-IRA in 2013
Questions
He would like to convert (back to) a Roth IRA as he would not be subject to an income test.
Does he need to wait > 30 days (per recharacterization rules)? or can it be done immediately?
Thank you
Permalink Submitted by Alan - IRA critic on Tue, 2013-09-10 17:57
It can be done immediately. This would not be a reconversion subject to a waiting period because there was no prior conversion, just a regular Roth contribution. Of course, if taxpayer has other pre tax IRA balances, the conversion will be mostly taxable. An 8606 will also need to be filed for 2012 reporting a non deductible TIRA contribution and if this is the only non Roth TIRA account, only the earnings that accompanied the recharacterization will be taxable. Conversion will of course be a 2013 conversion. Taxpayer could make the 2013 non deductible contribution now and convert them together if desired.