RECHARACTERIZE ROTH CONVERSION AND TAX RETURN
Client is recharacterizing a portion of their 2016 conversion prior to October 2017. Will the client need to amend their 2016 tax return or can they take care of the reporting of the recharacterization on their 2017 return? I know they will receive a 5498 in 2017 for the recharacterization. Thanks.
Permalink Submitted by Alan - IRA critic on Tue, 2017-09-12 17:39
Since 2016 has been filed, client probably reported the full conversion on Form 8606 and line 15 of Form 1040. Therefore a 1040X for 2016 would be needed to reduce the 8606 to the amount of the conversion that was retained. An explanatory statement indicating the date and amount of both the original conversion and the recharacterization can be included in the space provided on the 1040X. The 2017 return will not be affected at all, since the recharacterization 1099R and 5498 will be coded to indicate that the recharacterization applied to 2016.