ROTH Re-characterization and Reconversion
I have a Traditional IRA that was converted to a Roth in September 2014. The account has decreased in value a substantial amount. Can the account be re-characterized, then converted to a Roth again before the end of 2014? It would be beneficial to pay the conversion taxes in the 2014 tax year.
Thanks for any advice.
Permalink Submitted by Alan - IRA critic on Sun, 2014-10-05 19:16
If you recharacterize this conversion, you cannot reconvert the same assets until the later of 30 days after recharacterization or January 2nd, 2015. However, if you can show that you converted other funds not traceable to the amount recharacterized, there is no waiting period at all. One way to show you are converting different assets is to direct your recharacterization to a different IRA account than the one funding the second conversion. Note that you can also postpone your decision to December. Perhaps the conversion value will recover by then, and if it drops further, then a December recharacterization will result in a smaller transfer to the TIRA when you recharacterize.