I believe that is referring to a 401(k) (or other before tax) employer plan that was rolled in to a Roth IRA that would make it a taxable event on the the tax return for the year that it took place. It can then be recharacterized from the new after-tax Roth back to a before-tax Traditional IRA which would cancel the taxable rollover to the Roth. A non-taxable rollover form a preexisting 401(k) Roth to a Roth IRA cannot be converted to a Traditional IRA. A recharactorization can only cancel a tax that you would have paid, it cannot return tax that was paid when the 401(k) contributions were made. It would appear that that FAQ does not make that clear. [ @dmentz - check me on this please.]
HR1 (new tax law) SEC. 13611. Repeal of special rule permitting recharacterization of Roth conversions.
(b) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2017.
Some think that would not apply to rollover/conversions made in 2017 and recharactorized in 2018 and other think that since the change will apply to any Roth recharactorization done in 2018. It depends how the IRS will apply the new law, but I would not count on it being allowed at all in 2018.
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**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.**
