Tax return on recharacterization | Ed Slott and Company, LLC

Tax return on recharacterization

I converted part of a conventional IRA to a ROTH IRA on 12/28/2011 and recharacterized the converted amount back to the conventional IRA today (1/3/2012). Do I have to pay taxes on the 2011 tax return and file a 2011 1040X to claim the tax paid on the converted amount, or do I wait until I file the 2012 tax return for the recharacterization?

If you recharacterized the entire conversion, you do not report it on your 2011 return or your 2012 return. However, you need to include an explanatory statement with your 2011 return showing the amount and date of the conversion and the amount and date of the recharacterization, and what the recharacterization was worth when transferred back to the TIRA. No need to do anything with respect to this issue with your 2012 return since your 2011 return will include the explanatory statement. There is no 1040X needed because you can include everything you need to with your regular 2011 return. You do not pay taxes on the conversion because you recharacterized it.

Thank you Allen for addressing my tax questions.

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