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Roth IRA conversion amounts may not be recharacterized back to a Traditional IRA after December 31 of the conversion year, beginning with conversions made in 2018.
The quote above makes it sound like a Roth conversion initiated on January 1 could be recharacterized so long this recharacterization is completed by December 31 of the same year?
I originally assumed all Roth recharacterizations were eliminated.
With a quick searched I found this:
A Roth IRA conversion made in 2017 may be recharacterized as a contribution to a traditional IRA if the recharacterization is made by October 15, 2018. A Roth IRA conversion made on or after January 1, 2018, cannot be recharacterized. For details, see “Recharacterizations” in Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).
Sounds to me like there are no recharacterization on Roth Conversions...period.
The plain English of the Tax Cut and Job Acts says that starting with tax year 2018, Roth conversions cannot be recharacterized. Unfortunately, the experts advised people to unnecessarily rush their tax year 2017 recharacterizations before Jan 1.
At least those experts are now citing the IRS FAQ, January 23, 2018 that says what you wrote.
Can I recharacterize a rollover or conversion to a Roth IRA?
Effective January 1, 2018, pursuant to the Tax Cuts and Jobs Act (Pub. L. No. 115-97), a conversion from a traditional IRA, SEP or SIMPLE to a Roth IRA cannot be recharacterized. The new law also prohibits recharacterizing amounts rolled over to a Roth IRA from other retirement plans, such as 401(k) or 403(b) plans.
How does the effective date apply to a Roth IRA conversion made in 2017?
A Roth IRA conversion made in 2017 may be recharacterized as a contribution to a traditional IRA if the recharacterization is made by October 15, 2018. A Roth IRA conversion made on or after January 1, 2018, cannot be recharacterized. For details, see “Recharacterizations” in Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).
Comments
I originally assumed all Roth recharacterizations were eliminated.
With a quick searched I found this: Sounds to me like there are no recharacterization on Roth Conversions...period.
Can anyone confirm?
The plain English of the Tax Cut and Job Acts says that starting with tax year 2018, Roth conversions cannot be recharacterized. Unfortunately, the experts advised people to unnecessarily rush their tax year 2017 recharacterizations before Jan 1.
At least those experts are now citing the IRS FAQ, January 23, 2018 that says what you wrote. https://www.irs.gov/retirement-plans/ira-faqs-recharacterization-of-ira-contributions