Retirement Savings and Benefits
Questions and comments about IRAs, 401k accounts, social security, and other forms of retirement savings and benefits.
Still possible to undo 2017 Roth conversions
Posted by: Kaye Thomas, January 3, 2018 06:13PM
I've confirmed that the IRS will take the position that taxpayers can use the recharacterization provisions to undo Roth conversions occurring in 2017 until October 15, 2018. There is no immediate plan to provide official guidance, but possibly this will appear in Pub 590. Anyway, this is what they're telling anyone who asks.

In an article written just after the law was finalized, I said that despite some apparent ambiguity, the most likely interpretation was that 2017 conversions could not be recharacterized after 12/31/2017. This is one time I'm happy to be proven wrong.

Kaye Thomas
Fairmark.com

Re: Still possible to undo 2017 Roth conversions
Posted by: BruceM, January 18, 2018 12:58AM
Hi Kaye

I'm a little unclear on the TCJA rule change on Roth recharacterization.

If I'm reading the new rule correctly, it seems to be saying that Roth conversions from any retirement plan, including TIRAs, cannot be recharacterized for the years 2018-2025. However, direct IRA contributions MAY be recharacterized from TIRA-to-RIRA or RIRA-to-TIRA.

Am I reading this right?

Thanks

BruceM

Re: Still possible to undo 2017 Roth conversions
Posted by: Alan S., January 20, 2018 12:14AM
Yes, that is correct. Regular contributions can be recharacterized as before.

In addition, recharacterization of conversions done in 2017 can also be recharacterized as previously indicated, but it is now officially on the IRS site here: [www.irs.gov]



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