Transfer from Keogh plan to Roth

Forum|Forum|6 years ago
January 7, 2020
4 replies
35 views

Last year I transferred money from my Keogh plan to my Roth IRA intending it to be the (then) current year contribution, but Fidelity informed me that it was a recharacterization, not a contribution, and that I was still entitled to make the contribution. I've now accounted for the actual contribution in TurboTax, but I can't figure out where in TurboTax to report the recharacterization from the Keogh to the Roth so that I can update my Roth IRA basis on Form 8606. Help?

dmertz

Level 15

That makes no sense. You are't permitted to recharacterize from a Keogh plan to a Roth IRA, you can only do a taxable rollover from a traditional Keogh plan to a Roth IRA. One is only permitted to recharacterize current-year contributions to a regular traditional IRA to be contributions to a Roth IRA or recharacterize current-year Roth IRA contributions to be contributions to a regular traditional IRA.

Moving money from a Keogh plan to a Roth IRA can only be a taxable rollover. either by direct rollover (code G in box 7 of the Form 1099-R) or by indirect rollover (code 1, 2 or 7 in box 7 of the Form 1099-R). Entering either one of these and indicating that the money was moved to a Roth IRA will result in TurboTax treating the amount as conversion basis.

However, from your description it doesn't even sound like you did a rollover. It sounds like you took a regular taxable distribution from your Keogh plan (code 1, 2 or 7) and simply used the money to fund a new regular IRA contribution. Given what Fidelity said, perhaps you actually made a regular traditional IRA contribution with the intent to convert that money to Roth (a so-called backdoor Roth) but Fidelity actually performed a recharacterization of your traditional IRA contribution.

mariecjAuthor

Level 2

No, this question has *nothing* to do with a traditional IRA. I don't have one and do not want one. Fidelity just sent a tax form (5498?) that describes it as a rollover contribution.