Roth Recharacterization
I have a client who makes Roth conversions annually. He converted more than he intended in 2013 and may want to recharacterize part of the converted amount. If he recharacterizes some of the 2013 conversion can he stil make a 2014 conversion from the same Traditional IRA? The regs state that an IRA owner cannot convert the same “amount” until after 30 days have passed. The market value of my client’s Traditional IRA is high enough to cover the reconverted amount and have funds left over to convert this year.
Permalink Submitted by Alan - IRA critic on Mon, 2014-08-11 22:37
Then there is no need for a reconversion waiting period. In order to provide the IRS will clearer documentation in the unlikely event that they inquire, the recharacterization should be done to a new TIRA account. There will then be a track record showing that the same amount could not have been converted. OK to combine TIRA accounts again by direct transfer in a couple years from now.