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Old 02-22-2008, 03:53 PM
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Recharacterization of Roth to Traditional IRA

I recharacterized my 2007 Roth IRA contribution that I made in March 2007 to a traditional IRA as I need the deduction but my $4,000 contribution is now down to $3500. Does this mean I have to deposit another $500 to bring my balance back up to $4,000 or will the recharacterization move to the traditional as current value of $3500 with a basis of $4,000? Thanks in advance to all who respond.

Tristan



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Old 02-23-2008, 11:08 AM
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Recharacterization of Roth to Traditional IRA.

No, you are not required to add back $500, and the recharacterization will move to the traditional IRA as current value of $3,500, with a basis of $4,000.

I am not sure why you recharacterized your Roth IRA?? I hope you did the proper calculation to determine whether or not it was prudent to do so, consulting a tax adviser is very important to determine whether this strategy is beneficial to you in the long term!

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