I recharacterized a traditional IRA contribution to a Roth in my 2019 tax year and my brokerage just moved shares, which included a small capital gain and pushed the recharacterization just over $6K. As O go to amend my 2019 return, TT now says I overcontributed to the Roth. Is that correct? We need to do a similar recharacterization for my wife for 2020, and I don't want to repeat any penalties I am incurring here.
@holzhauzer wrote:
I recharacterized a traditional IRA contribution to a Roth in my 2019 tax year and my brokerage just moved shares, which included a small capital gain and pushed the recharacterization just over $6K. As O go to amend my 2019 return, TT now says I overcontributed to the Roth. Is that correct? We need to do a similar recharacterization for my wife for 2020, and I don't want to repeat any penalties I am incurring here.
"Just" moved" - in 2021? A 2019 contribution had to be characterized before July 15, 2020 (or Oct. 15 2020 if you filed a timely extension).. After that it is not eligible to be recharacterized.
In 2021 it can only be removed with a normal distribution. Anything put into your Roth in 2021 is a new 2021contribution subject to the contribution limits.