Can you Recharacterize an already recharachterized contribution?
Client funds Roth IRA. Feels like they won’t be eligible, so recharacterizes those contributions to TIRA. End of year, tax advisor says you CAN fund a Roth and so he wants to recharacterize back to Roth. is this allowable? -m
Permalink Submitted by Alan - IRA critic on Wed, 2017-04-05 20:07
M, no it is not allowed. A recharacterized conversion can be reconverted after a waiting period but a recharacterized regular contribution cannot be re-recharacterized. However, if the contribution due date has not yet passed the contribution can be returned with earnings and then recontributed as a new contribution. In this case the client’s gains would have to be distributed subject to tax, but client could still preserve the Roth space by making a new contribution.
Permalink Submitted by [email protected] on Thu, 2017-04-06 15:57
thank you. -m