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Usually, when income cannot be reliably estimated and you worry about the limits - you should contribute to Traditional IRA. Then, if you cannot deduct - you chose whether to re-characterize (if you're within limits for Roth), or convert (if you're not within limits for Roth) to Roth. The reason is that you can always contribute to Traditional IRA, the ...


2

The deadline for recharacterizing the 2010 roll over was October 17th 2011. What was the deadline to recharacterize a 2010 rollover or conversion to a Roth IRA? You had until October 17, 2011 (because October 15, 2011, was a Saturday), to recharacterize your 2010 rollover or conversion to a Roth IRA if you filed your 2010 tax return on time, ...


2

The original contribution of X to Roth IRA in your reasoning is a red herring. It doesn't exist, never happened. You recharacterized it, so what you did in reality is contribute X to Traditional IRA.


2

It seems correct. The "basis" of a Traditional IRA is the "after-tax part" of the Traditional IRA, i.e. the part that won't be taxed on withdrawal. The basis doesn't change as the value of the Traditional IRA changes. So, for example, if the Traditional IRA grew, then the "earnings" are not part of the basis (i.e. the earnings are before-tax and need to be ...


2

You cannot recharacterize a distribution from an IRA the way you can recharacterize a contribution. It the latter case, you are in effect telling your IRA custodian to treat the contribution as having been made to a different kind of an IRA from the very first day that the contribution was originally made. As described in JoeTaxpayer's answer, you can put ...


2

The formula is correct. It matches Worksheet 1-3 on page 30 of Publication 590-A. Scottrade and Vanguard will both let you use any assets that are in that account to do an in-kind recharacterization. I didn't find anything definitive in the IRS pub.


1

Yes, depending on the timing. You generally can make a tax-free withdrawal of contributions if you do it before the due date for filing your tax return for the year in which you made them. This means that even if you are under age 59½, the 10% additional tax may not apply. These distributions are explained in Pub. 590-A. I believe any growth is subject ...


1

I don't see any rule that you cannot recharacterize one way and recharacterize it again the other way. Since you are allowed to both recharacterize Traditional IRA contributions to Roth IRA contributions and vice versa, you should be able to combine them to go back to where you started. When a contribution to one type of IRA is recharacterized to a ...


1

You should be able to do #1 (recharacterize it again to a Traditional IRA contribution), and then, if you want, you can do the conversion to Roth IRA like you wanted to do but never did. I am not sure whether they can do #3 (retroactively re-code it to a conversion), though I doubt it. If you withdraw the excess contribution from your Roth IRA (#2), you ...


1

There is nothing to 'fix' at this point. If the recharacterization was for the full amount converted, the broker forms you received should indicate this. Since the recharacterization was done before year end, you may not get a 1099 at all. If you do, you'll indicate on your tax return that this amount was eligible for recharacterization and it all was. ...


1

This area uses very particular terms, I bolded those. Scenario 0 (not yours): you contribute to a traditional IRA in non-deductible mode (for some reason, e.g. your income is too high to qualify for a normal IRA or Roth). You mean to do a Backdoor Roth. You can convert to Roth immediately. Scenario 1: you contribute to a Roth, not realizing you are ...


1

If your 2015 U.S. income is $0, then you won't be able to contribute to either a Roth or Traditional IRA for 2015. With a Roth IRA, normally excess contributions are subject to a 6% excise tax. However, if you withdraw your contribution before the October 15 extension deadline along with any earnings that your excess contribution earned, it will be treated ...


1

No, it is not a taxable event. You will not have to pay tax on the $500 in this scenario. See the IRS publication 590-A: To recharacterize a contribution, you generally must have the contribution transferred from the first IRA (the one to which it was made) to the second IRA in a trustee-to-trustee transfer. If the transfer is made by the due date (...


1

A withdrawal from an IRA has a 60 day period during which time you may roll it over to another IRA, effectively "borrowing" and returning the money. Once that time has passed, the transaction is complete. Your question asks in one place about deposit, then withdrawal. You might edit to clarify the timing of your situation and your intentions.


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For the broker it may be the same, since the actual act of recharacterization requires you to withdraw the money from one account and put it into the other. The specifics of withdrawing from Roth for re-characterization may be warranting a special procedure for them, but from Traditional to Roth - they're blind to whether it is conversion or re-...


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You have two different operations going on: Recharacterization: change a contribution from one type of IRA to another type of IRA. Excess Contribution: Money was contributed that exceed the allowable limits. They each have of a set of rules regarding amounts, timelines, taxes, and penalties. The excess money can't be recharacterized except during a ...


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William - You need to go to a local branch right now. I know few brokers that will guarantee a same day transaction of this type. I tried to read your question a few times, and am stuck. I believe I understand Traditional IRAs, Roth IRAs, and the rules of conversion pretty well. It sounds to me like you want to have income in 2010 for one transaction, and ...


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