Recharacterize current year ROTH contribution to Traditional
As I understand it, if this is done by 4/15/14 then the contribution plus the earnings would not be taxable. Recharacterizing the contribution assumes the contribution went into the second account from the beginning.
Permalink Submitted by Alan - IRA critic on Wed, 2014-04-02 04:18
If a regular Roth contribution is recharacterized by the deadline (10/15 for those who either filed or filed an extension by 4/15) as a TIRA contribution, that contribution may or may not be deductible. If not deductible, the contribution should be reported on Form 8606.
Permalink Submitted by James Michishima on Wed, 2014-04-02 23:42
So does that mean the earnings in the account are asumed to be as if earned in the traditional, right?
Permalink Submitted by Alan - IRA critic on Wed, 2014-04-02 23:50
Right. Either way with a recharacterized contribution, the earnings are transfered to the TIRA and are not currently taxable. They would not be taxable until they were distributed from the TIRA or converted to a Roth IRA.