Roth IRA Reconversions

The deadline of October 15^th has passed for recharacterizing Roth conversions done in 2015. (You have until October 15, 2017 to recharacterize your 2016 Roth conversions.)

Now that you have recharacterized a 2015 conversion, what comes next? Can you reconvert those funds? The answer is yes, after a waiting period.

The rule for reconversions can be confusing. You can reconvert in the year following the conversion or more than 30 days after the recharacterization, whichever is later. What that means in plain English is that you can convert IRA assets only once per year. You cannot convert stock A to a Roth IRA in January, recharacterize it in March and reconvert it a week later, recharacterize it in July and reconvert it a month later. You can only convert stock A once in the year.

So when can you reconvert stock A? Following are some examples of the rule.

You convert stock A in January and recharacterize it in July of the same year. You can reconvert stock A in January of the following year. The following year is later than the more than 30 days waiting period.

You convert stock A in January and recharacterize it on December 27^th of the same year. You can reconvert stock A on January 28^th of the following year. The more than 30 days is later than waiting until the following year since January 28^th is already in the following year.

You convert stock A in January and recharacterize it on October 2^nd of the following year. You can reconvert stock A on November 3^rd, more than 30 days after the recharacterization. Since you are already well into the year following the conversion, the more than 30 days is the waiting period before doing a reconversion.

If your IRA holds assets other than the stock A that you recharacterized, you can convert those other assets to a Roth IRA at any time. The waiting period only applies to a reconversion of the asset that was recharacterized.