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01-18-2009, 11:10 AM
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#1 |
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Registered User
Join Date: Jan 2009
Posts: 1
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Another Recharacterization Question
I am retired and in the process of converting my traditional IRAs to Roths. Last year I converted around $90000 worth of mutual funds and will pay (have paid) substantial taxes on these conversions. The questions is...
If I recharacterize all these conversions will I owe any taxes at all on the conversions. I'm not sure exactly how the recharacterization works for tax purposes, but the dollar amount of the conversion was $90,000 and if I recharacterize all the conversions, it will now only total about $50000. Will I have to pay taxes on the difference between the $90000 converted and the $50,000 recharacterized? Of course, if I would have to pay taxes on the difference I'll just leave it as is. Any help and/or a link to an IRS document describing this exact scenario would be really appreciated. |
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01-18-2009, 08:06 PM
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#2 |
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Registered User
Join Date: Oct 2001
Posts: 1,586
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Chinook9,
You are not the only taxpayer in this situation. Contact the IRA custodian and tell them you want to Recharacterize your 2008 converson of $90,000. The custodian will determine the amount you need to Recharacterize. Put this Recharacterization amount into a separate Traditional IRA. If questions come-up, this will make clarification of your actions easier. You have until October 15, 2009 to do the Recharacterization. It is probably best to do this earlier instead of later. Last edited by clydewolf : 01-18-2009 at 08:08 PM. |
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