I converted $10,000 from my Traditional IRA to my Roth IRA in 2017.
In December 2017, I sent an election to the Trustee to recharacterize $11,000 (the $10,000 plus $1000 gain attributable to the conversion) back to the Traditional IRA.
The Trustee actually transferred the $11,000 in February 2018, at which time there was a $1000 loss attributable to the conversion, so I believe only $9000 should have been recharacterized.
How should this be reported in TurboTax?
You'll need to sign in or create an account to connect with an expert.
That's a real mess. Assuming that you had no regular contributions to this Roth IRA account for 2017 that can be considered to have been included in that recharacterization, the $2,000 transferred that should not have been would have to be considered to have been a regular distribution from the Roth IRA and a regular contribution to the traditional IRA. If you were age 70½ or older in 2018 or will have insufficient earnings in 2018 to be able to make a $2,000 contribution to a traditional IRA, you have an excess contribution to the traditional IRA for 2018.
If you cannot get the trustee to issue a code R 2018 Form 1099-R showing only $9,000 transferred, plus a new code J, T or Q 2018 Form 1099-R to show the remaining $2,000 as a regular distribution, you'll need to prepare substitute Forms 1099-R (Forms 4852) to do so and provide explanation. You'll also need to enter the $2,000 as a regular traditional IRA contribution. I don't know of any precedent for the trustee to be able to simply "undo" the transfer of the $2,000 as if it never happened.
There is some chance that you could obtain a return of contribution of the $2,000 from the traditional IRA and roll it back into the Roth IRA under self certification that the circumstances qualify for a waiver of the 60-day rollover deadline. You would need to convince the trustee that the $2,000 was deposited into an account that you mistakenly thought was a retirement plan that was eligible to receive this transfer. Of course the amount distributed as a return of contribution from the traditional IRA would have to be adjusted for gain or loss since the time of the deposit of the $2,000 into the traditional IRA, and your rollover back to a Roth IRA would have to be $2,000 regardless of the amount distributed as a return of the $2,000 contribution. Self-certifying that this is eligible for a waiver of the 60-day deadline might be stretching things a bit, though. Alternatively, you might be able to convince the trustee that the result was a separate $2,000 traditional IRA contribution (as it actually seems to be under the circumstances) and that it is eligible for recharacterization to a Roth IRA, provided that you are eligible to make a $2,000 Roth IRA contribution for 2018. Otherwise, if you are eligible to have made a $2,000 traditional IRA contribution, you could just leave it in as a regular traditional IRA contribution for 2018.
That's a real mess. Assuming that you had no regular contributions to this Roth IRA account for 2017 that can be considered to have been included in that recharacterization, the $2,000 transferred that should not have been would have to be considered to have been a regular distribution from the Roth IRA and a regular contribution to the traditional IRA. If you were age 70½ or older in 2018 or will have insufficient earnings in 2018 to be able to make a $2,000 contribution to a traditional IRA, you have an excess contribution to the traditional IRA for 2018.
If you cannot get the trustee to issue a code R 2018 Form 1099-R showing only $9,000 transferred, plus a new code J, T or Q 2018 Form 1099-R to show the remaining $2,000 as a regular distribution, you'll need to prepare substitute Forms 1099-R (Forms 4852) to do so and provide explanation. You'll also need to enter the $2,000 as a regular traditional IRA contribution. I don't know of any precedent for the trustee to be able to simply "undo" the transfer of the $2,000 as if it never happened.
There is some chance that you could obtain a return of contribution of the $2,000 from the traditional IRA and roll it back into the Roth IRA under self certification that the circumstances qualify for a waiver of the 60-day rollover deadline. You would need to convince the trustee that the $2,000 was deposited into an account that you mistakenly thought was a retirement plan that was eligible to receive this transfer. Of course the amount distributed as a return of contribution from the traditional IRA would have to be adjusted for gain or loss since the time of the deposit of the $2,000 into the traditional IRA, and your rollover back to a Roth IRA would have to be $2,000 regardless of the amount distributed as a return of the $2,000 contribution. Self-certifying that this is eligible for a waiver of the 60-day deadline might be stretching things a bit, though. Alternatively, you might be able to convince the trustee that the result was a separate $2,000 traditional IRA contribution (as it actually seems to be under the circumstances) and that it is eligible for recharacterization to a Roth IRA, provided that you are eligible to make a $2,000 Roth IRA contribution for 2018. Otherwise, if you are eligible to have made a $2,000 traditional IRA contribution, you could just leave it in as a regular traditional IRA contribution for 2018.
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
JKONG5150
Returning Member
jb52847
New Member
tyler18640
Level 1
darylwalker1
Level 3
Louise35
Level 1