Thanks for your response. My issue isn't really what type of assets I'm moving, it's the value of the ones purchased with the contribution. Even though $8,235.29 is what the formula spits out, it doesn't reflect the reality of what gain is attributed to the contribution.
For example, the $3,000 gain that the account sees over the computation period is due to a $500 appreciation of the 10 stocks purchased with the 2024 contribution and a $2,500 appreciation of the stocks purchased prior to the contribution. More simply, that means the account would have gained $2,500 even if I made no contribution in 2024 and only $500 gain is reasonably attributable to the contribution. Since $500 is less than $1,235.29, recharacterizing based on the formula would involve pulling out gains that are obviously not attributable to the 2024 contribution. I assume that the excess would then be considered an early withdrawal or a similar taxable event.
So in this case do I just recharacterize the $7,500 ($7,000 contribution + $500 attributable gain), attach the explanation to the 2024 return, and disregard how the broker chooses to report the recharacterization on my future tax forms?
