RECHARACTERAZATION OF A IRA

Forum|Forum|3 years ago
April 17, 2023
1 reply
11 views

How do I recharacterize a Traditional IRA. My client never took the $6000 Traditional IRA

deduction and wants to put it in a Roth IRA.

ProSeries Professional

This topic has been closed for replies.

Just-Lisa-Now-

Intuit Community Champion

The non-deductible IRA contribution would appear on the 8606 in the year it was contributed, when its converted to a ROTH the non-deductible basis will offset the taxability created by the conversion 1099R on the return.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

qbteachmt

Level 15

"the non-deductible basis will offset the taxability created by the conversion 1099R on the return."

Maybe. If the Trad IRA account already has deducted contributions and earnings, then there still is a pro rata tax in the conversion. Even that $6k basis can have taxable earnings, if it was in the Trad account awhile, which creates a taxable conversion. Of course, recently there has been a lot of loss events, so it's hard to know. Just remember there is no "specificity" with the conversion. Unless they only ever had this $6k in there, it is not literally the same $6k that is converted. It's a value conversion.

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T

Taxtime3

Level 5

Did they do away with the back door conversions. I think it was on the table anyway.

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