Please note that Portnoff Financial has joined with Tempus Wealth Planning and some information here may no longer be applicable. Please contact Jeremy Portnoff at 949-226-8342 (CA) or 732-226-3113 (NJ) for additional information.  We apologize for any confusion while we are in transition. 



West Coast Phone: 949-226-8342
East Coast Phone: 732-226-3113

Resources

Roth Recharacterization Confusion

  • A Roth recharacterization is the process of undoing all or part of a Roth conversion as if it never happened and eliminating the income tax that would have been due on the amount converted.
  • A Roth conversion can be recharacterized for any reason.
  • A partial recharacterization can be done.
  • Recharacterizations must go back to an IRA, even if the conversion was done from a plan.
  • The deadline for recharacterization is October 15th of the year following the year of conversion.
  • In-plan Roth 401(k) conversions cannot be recharacterized.
  • If the tax return has already been filed, a recharacterization can still be done and the tax return amended.
  • The amount recharacterized may not be the same amount moved from the Roth IRA back to the IRA. For example, if an IRA worth $100,000 were converted to a Roth, dropped in value to $75,000 and then recharacterized, the amount moved back to the IRA is the $75,000 however the amount recharacterized is the original $100,000.


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