2010 Roth Conversion Re-Characterization Deadline Approaching
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October 7, 2011 |
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For additional information and discussion on this topic, please get in touch with your regular HW&Co. professional or one of our Tax Professionals listed below. Donald C. May, CPA/ABV, CVA Edward C. Lowe, CPA, MAFIS |
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2010 Roth Conversion Re-Characterization Deadline Approaching |
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2010 was a banner year for Roth Conversions. For 2010 conversions, taxpayers were given the option to defer the recognition of conversion income to 50% in 2011 and 50% in 2012. When a Traditional IRA is converted to a Roth IRA the amount converted is considered a withdrawal from the Traditional IRA resulting in taxable income, even though the value of a Roth IRA may have dropped the account owner’s conversion, income is still based on the value at the conversion date. Given the recent market downturn, this may be the case for many 2010 conversions. The IRS will allow account holders to “re-characterize” 2010 Roth conversions back to Traditional IRA’s. These “re-characterizations” must be done before October 17, 2011 by notifying your Roth IRA trustee. Please feel free to contact any of our Tax Professionals if you have any questions on re-characterizing your 2010 Roth conversion. |
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