I want to be very specific about terminology.
"Recharacterize" as regards IRAs is a specific term that means you treat a contribution to one kind of IRA as having been made to a different kind of IRA instead. For example, if you make a contribution to a traditional IRA and latter decide you would prefer it had been made to a Roth IRA, you can "recharacterize" the contribution instead of withdrawing it from the IRA and making a new contribution to the Roth.
If you are buying and selling investments within an IRA account, that is not "recharacterization." There are no capital gains implications of buying and selling shares inside an IRA. Nothing that happens in an IRA has any tax consequences, the only thing that counts is what you withdraw. Your withdrawals are taxed as ordinary income, no matter where it came from. If you have a huge gain on one stock and you sell it for another stock, that's not taxed as a capital gain. You just have more money to withdraw, and you only pay tax on what you withdraw.
Converting money from a traditional IRA to a Roth IRA is a conversion, it is also a specialized type of rollover. It is the same broad concept as withdrawing money from the traditional IRA, paying the income tax, and then depositing it in the Roth IRA (although the laws on how you do a conversion are quite different than actually making a withdrawal). Normally, the only thing that counts is the money. If you convert $10,000 from an IRA to a Roth IRA, you pay tax on $10,000. It doesn't matter what you sold to get out of the IRA or what you bought in the Roth IRA, a $10,000 conversion is a $10,000 conversion.
It seems you are trying to monkey around with your cost basis. But cost basis is irrelevant in an IRA or Roth IRA. If you shares of ABC for $10 each inside your IRA and it is now worth $1000, you will pay tax on $1000 when you withdraw it (because the $10 was contributed tax-free). If you sell the ABC stock and buy 1 share of XYZ at $1000/share, and then sell it, you still pay tax on $1000, because that's the amount of cash you withdraw.
Now, it appears you are trying to move specific stocks, rather than just moving money. But you aren't "recharacterizing your positions". The word recharacterize only applies to deciding that your annual contribution should have gone some place different than you first intended. You want to do a Roth conversion with specific stocks, instead of converting them to cash first.
If you want to do a Roth conversion that keeps your current share position instead of selling, getting cash, and rolling over the cash, there may be specific rules on which shares your can sell or how the conversion is calculated. I will ask for more help. But I'm not sure that you understand how investing inside an IRA (including Roth IRAs) is very different than investing outside an IRA.
@Hal_Al
@dmertz
