Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Recharacterizing an IRA Conversion?
Old 01-26-2013, 10:18 AM   #1
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 66
Recharacterizing an IRA Conversion?

I converted a traditional IRA CD in January of 2012 to a ROTH IRA CD.

Well, I just did the taxes on trubotax and because of other income, our taxes are through the roof!

I'm looking to recharacterize the ROTH IRA CD back to a traditional IRA CD this week.

Question is: Do I get immediate credit on my 2012 taxes so I don't have to pay the taxes on the conversion?
__________________

__________________
marc515 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-26-2013, 10:50 AM   #2
Thinks s/he gets paid by the post
RockyMtn's Avatar
 
Join Date: Jul 2009
Location: North Scottsdale
Posts: 1,234
Yes I believe that is the case.
__________________

__________________
FIRE'D in July 2009 at 51...Never look back!
RockyMtn is offline   Reply With Quote
Old 01-26-2013, 11:26 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,936
Quote:
Originally Posted by marc515 View Post
I converted a traditional IRA CD in January of 2012 to a ROTH IRA CD.

Well, I just did the taxes on trubotax and because of other income, our taxes are through the roof!

I'm looking to recharacterize the ROTH IRA CD back to a traditional IRA CD this week.

Question is: Do I get immediate credit on my 2012 taxes so I don't have to pay the taxes on the conversion?
.....basically...........you will report the net conversion.....0 in this case so you won't be taxed on it.....see the instructions for lines 16, 17, & 8 here
http://www.irs.gov/pub/irs-pdf/i8606.pdf for form 8606.
You will also have to include a narrative description of the recharacterization so IRS knows what you did.

Hopefully the CD went into a separate Roth or at least 1 only containing other CDs . It could get a little messy if there were stocks in there and valuations changed resulting a different value to be removed back to the TIRA.
__________________
kaneohe is offline   Reply With Quote
Old 01-26-2013, 11:46 AM   #4
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 66
Thanks guys!
__________________
marc515 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 02:47 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.