SERIOUS NEED TO RECHARACTERIZE A ROTH

Submitted by CARROLL WILLIAMS on Thu, 2018-12-20 03:05

I have intended for several months to recharacterize part of my 2018 Roth Conversion. Just today I have seen that these are no longer allowed. Are there any solutions to my problem? Thank you.



Submitted by Alan - IRA critic on Thu, 2018-12-20 03:46

There is no way to recharacterize a conversion, so the conversion  is permanent. What is the problem, a drop in value after the conversion, or perhaps the conversion breeches some taxable income threshold?

Submitted by CARROLL WILLIAMS on Thu, 2018-12-20 03:58

Thanks Alan, the answer is yes to both reasons for my need.  I didn’t catch this change and my brokerage didn’t mention it when I did my conversions  back in FEB.  I was just planning on a late recharacterization. 

Submitted by Alan - IRA critic on Thu, 2018-12-20 04:49

Well, perhaps the conversion looks like a loser right now, but things could change in the future. Perhaps a year from now the value will have increased enough to look much better, and the higher your marginal rate becomes in retirement, the better the conversion result will be. 

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