"recharacterize" conventional IRA to Roth IRA?

#2 03-09-2005, 09:39 PM

rlsusenet[at]NOSPAMPUHLEEZschnapp.org wrote:

- quote -

> I've just done our taxes, and it turns out that we were
> eligible to contribute to a Roth IRA for 2004.
> Since our conventional IRA contributions are nondeductible
> anyway, choosing a Roth is a no-brainer -- except for one
> thing: we already made our 2004 IRA contributions last
> March.
> Is it possible to remove those contributions from our
> conventional IRA accounts in order to establish Roth IRA
> accounts? We are younger than the minimum withdrawal age.
> And we're not eligible for "conversion".
> Any suggestions?

Contact the bank and tell them you wish to "recharacterize"
your March 2004 IRA contribution to a Roth IRA contribution
using a trustee-to-trustee transfer. The bank should be
aware of how to accomplish this. The amount transferred
should include the contribution and the earnings or if there
is loss then the amount transferred is the net after the
loss. It must happen before the due date of your return.
There are no tax consequences of the recharacterization.
Your contribution date to your Roth IRA will be the date
back in March 2004 that you made the original contribution.
You don't have to complete any form if you recharacterize
the whole IRA contribution but you should attach a statement
that explains how much of the 2004 IRA contribution was
recharacterized to a Roth in 2005.

--
Alan
http://taxtopics.net

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#1 03-09-2005, 08:42 PM

"rlsusenet[at]NOSPAMPUHLEEZschnapp.org" <NoSuchPerson[at]bigfoot.com> wrote:

- quote -

> I've just done our taxes, and it turns out that we were
> eligible to contribute to a Roth IRA for 2004.
> Since our conventional IRA contributions are nondeductible
> anyway, choosing a Roth is a no-brainer -- except for one
> thing: we already made our 2004 IRA contributions last
> March.
> Is it possible to remove those contributions from our
> conventional IRA accounts in order to establish Roth IRA
> accounts? We are younger than the minimum withdrawal age.
> And we're not eligible for "conversion".

Yes. You can recharacterize the regular IRA contribution to
a Roth contribution. Ask the trustee of the IRA.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

03-09-2005, 08:23 PM

"rlsusenet[at]NOSPAMPUHLEEZschnapp.org" <NoSuchPerson[at]bigfoot.com> wrote:

- quote -

> I've just done our taxes, and it turns out that we were
> eligible to contribute to a Roth IRA for 2004.
> Since our conventional IRA contributions are nondeductible
> anyway, choosing a Roth is a no-brainer -- except for one
> thing: we already made our 2004 IRA contributions last
> March.
> Is it possible to remove those contributions from our
> conventional IRA accounts in order to establish Roth IRA
> accounts?

You answered the question in your subject line. Contact
your custodian to arrange a recharacterization of your 2004
contribution and earnings on it.

--
Phil Marti
Clarksburg, MD

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

#-1 03-08-2005, 08:58 AM

I've just done our taxes, and it turns out that we were
eligible to contribute to a Roth IRA for 2004.

Since our conventional IRA contributions are nondeductible
anyway, choosing a Roth is a no-brainer -- except for one
thing: we already made our 2004 IRA contributions last
March.

Is it possible to remove those contributions from our
conventional IRA accounts in order to establish Roth IRA
accounts? We are younger than the minimum withdrawal age.
And we're not eligible for "conversion".

Any suggestions?

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

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