@david-k1 wrote:
We are re-characterizing a Roth IRA contribution due to income exceeding allowable (paying all the extra taxes and reporting the earnings) and putting into a traditional IRA and want to transfer to a backdoor Roth. How long must you wait before you can convert or roll over your funds back to a Roth IRA from the Traditional IRA?
No waiting. Immediately.
But note that the recharacterization must be reported in the tax year that the contribution was *for* and a conversion in the tax year converted.
The proper way to report the recharacterization and earnings which is to enter the 2020 IRA contribution in the IRA contribution interview section and then say yes to "Did you switch from a Roth to a Traditional IRA - recharacterize".
The amount The amount of the original Roth contribution must be entered - not any earnings or losses.
Then TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharactorized.
There is no tax or penalty on the before-tax earnings since the earning were simply switched into the recharactorized account.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
