Can I undo an IRA to Roth conversion? Conversion made today. Did not realize I had to aggregate accounts. Broker won't let me undo.

Forum|Forum|3 years ago
January 4, 2023
1 reply
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I made $6,000 of contributions to a traditional IRA I opened during 2022. I read that I could convert this to a Roth IRA and only have to pay penalty on earnings. I made the conversion today, but learned shortly thereafter that I will have to aggregate all of my IRA accounts and the conversion amount is prorated. So, I thought all of my $6,000 would be converted tax free, but now realize that it is proportionate to my total balance. I'm trying to undo it, but the broker has already said it's irrevocable, even though it only happened today.

TurboTax Online

Best answer by dmertz

Recharacterizations of Roth conversions were made impermissible by the Tax Cuts and Jobs Act of 2017. You are stuck with the tax consequences of the Roth conversion.

Only a portion of your basis in nondeductible traditional IRA contributions will be applied to this Roth conversion reportable on your 2023 tax return. The rest of your basis will remain with your traditional IRAs to be applied to future distributions from your traditional IRAs until you have no more funds in traditional IRAs at year end.

dmertzAnswer

Level 15

Recharacterizations of Roth conversions were made impermissible by the Tax Cuts and Jobs Act of 2017. You are stuck with the tax consequences of the Roth conversion.