Recharacterization: in 2019 I contributed $7,000 to the IRA also transferred shares from IRA to Roth ($31,000). How do i calculate the earnings/loss? thank you. Adrian

APR11 · ‎July 15, 2020

one detail: the shares were bought in 2017 at much higher value, approx. $50,000

macuser_22 · ‎July 15, 2020

The financial institution that does the recharactorization must calculate the earnings/loss and move that amount to the Traditional IRA and issue a 1099-R with a code R in box 7.

The earnings/loss are based on the value of the entire Roth from the time of the contribution to the time of removal pro-rated to the amount of contribution.

Once a dollar is in an IRA it is the same as any other dollar and does not have it's own earnings or loss.

**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.**

Expert does your taxes

Do it yourself

Resources

Support

Recharacterization: in 2019 I contributed $7,000 to the IRA also transferred shares from IRA to Roth ($31,000). How do i calculate the earnings/loss? thank you. Adrian