DanielV01
Expert Alumni

Retirement tax questions

You might have to amend the 2017 returns.  It depends on what you originally reported.  When you recharacterize a contribution, you are treating the original contribution as if it never happened.  If you recognized this and did not take a $1000 deduction for your original 2017 IRA contribution, you do not need to amend the 2017 return, because you were already considering the original contribution to be a Roth contribution, and not a TIRA contribution.  

You are correct about the growth.  Since the recharacterization changes the nature of the original contribution to a Roth, your growth is also considered retroactively to be Roth IRA growth.  Growth on a Roth IRA is tax-free unless you prematurely distribute the growth.  

If you did report the $1000 deduction on your 2017 return, then you would amend the return because the recharacterization disallows the $1000 deduction.  

As far as the reporting is concerned, that sounds correct.  Your plan administrator may have reported both transactions on one form (Vanguard does this), but with two different box 7 codes you do want to report them as if they are separate 1099-Rs.  In essence they are, because they are two different types of transactions.

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