Recharacterization of Roth to Traditional IRA by a minor?

[jrhoya]

My 17 year old son had a job in 2019, and he opened a Roth in the amount of his wages. He later inherited stock from his grandparents. When that stock was sold in 2019, it pushed him over the income limits to open a Roth. Turbo Tax software says the money should be recharacterized to a traditional IRA, but my broker says a minor living in Iowa cannot recharacterize an IRA. 

[BobinCT]

Maybe he should say it all needs to be returned as an excess contribution?  Then he could contribute to a traditional IRA (for 2019 or 2020)?

[dmertz]

I would ask the broker to cite the law that prevents a minor in Iowa from recharacterizing since that position seems contrary to federal law.  26 U.S. Code § 408A(d)(6) explicitly permits recharacterizations:

https://www.law.cornell.edu/uscode/text/26/408A#d_6

Perhaps the broker is confused and thinking that the recharacterization would be of a Roth conversion, which is no longer permitted to be done by anyone.

[DaveF1006]

As far as know, there is no age restriction in making a re characterization to a traditional IRA. it also sounded like your broker was quoting from state law and not federal law. keep in mind, these people are not tax experts although they may think they are experts in ALL financial matters.

[fanfare]

If your son will have income again up to the amount of the Roth contribution,

he can pay a six percent penalty and resolve the excess next year with that income.