Recharacterize Roth to Non-Ded and then do Back Door?
In 2015, my client realized after the fact that he wasn’t eligible to contribute to his Roth. So he recharacterized to his non-deductible IRA. He has no other traditional (pre-tax) IRA – only the Roth and non-deductible. In 2016, knowing he was still ineligible for the Roth, he contributed $5500 to his non-deductible IRA. About a year later in 2017, we did a back-door and moved this to his Roth.
My question is…. Can we do a back door with the 2015 money that’s in the non-deductible IRA and move it back to his Roth?
Permalink Submitted by Alan - IRA critic on Sun, 2018-06-17 19:26
Yes. A conversion can be done at anytime and it is odd that the entire TIRA balance was not converted in 2017 since a partial conversion was done then. The 2017 8606 will show how much basis remains on line 14. The value of his TIRA that exceeds this basis amount will be taxable from the conversion. Usually, for a back door Roth strategy includes doing the conversion immediately after the non deductible TIRA contribution.