Can Roth Conversion be Recharacterized by executor?
I’ve got an elderly client. We would like to do a Roth Conversion with the plan to recharacterize some or all in the following year. What is taxpayer dies? I don’t see any limitation on this…
Thanks
Jim M
Permalink Submitted by Alan - IRA critic on Fri, 2015-10-02 17:46
Jim, a conversion can be recharacterized by the decedent’s executor or other person responsible for filing decedent’s final return. Usual deadlines apply. Ref Pub 590-A, p 31.
Permalink Submitted by James Magno on Fri, 2015-10-02 19:07
Alan-Thanks for directing me to the IRS pub. I see a problem though in thinking this through. Beneficiaries typically take control of the IRA assets post mortem. The executor can elect to recharacterize but there must be cooperation. An uncoperative benficary would be able to potentiall withdraw assets from the Roth IRA before the recharacterization took place.Nonetheless thank you for the direction on where to look.Best regards,Jim Magno
Permalink Submitted by Alan - IRA critic on Fri, 2015-10-02 19:58
Yes, the availability of this option does come with a warning that there are potential conflicts of interest with the recharacterization decision. What if the beneficiary on the TIRA is different from the Roth IRA, or more likely what if the estate beneficiaries are different than the IRA beneficiaries? But if there are no conflicts and all parties agree, the recharacterization option can be useful.