Roth Conversion or Recharacterization Inquiry
Client did a Roth conversion from a traditional IRA on 11/09/17 for $24,500 and then recharacterized the funds on 02/27/18 from the Roth IRA back to the traditional IRA. The client would now like to move $7,000 of the $24,500 back to the Roth account. Can this be done through a second recharacterization from the traditional IRA to the Roth IRA or would a Roth conversion need to be processed.
Thank you,
Permalink Submitted by Alan - IRA critic on Mon, 2018-03-19 01:07
This would require a reconversion of 7000, and can be done as of 3/29/2018, but not sooner because there is a 30 day waiting period following a recharacterization before any of the recharacterized funds can be reconverted. The new conversion will be taxable in 2018. Remind client that conversions can no longer be recharacterized starting with 2018 conversions, therefore client must be sure what amount to convert.