Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
JL_Kosa
Level 2

What value do I put for recharacterization of IRA when there's been a loss since orig contribution?

I opened a Roth IRA last month and contributed $1000 to it for 2020.  Then I decided it would be better if that contribution was made into a Traditional IRA to be deductible for 2020.   I arranged with my bank to recharacterize the entire amount in the Roth over into the traditional but the value had gone down to $950.   In TT, I get to the screen that ask "Tell us How much you Transferred".   Do I tell it the original amount, $1000 or the reduced amount $950?   This was a brand new Roth acct so there was nothing in it before, and there will be nothing in it (for now) after the recharacterization.

Thanks!

1 Best answer

Accepted Solutions
DaveF1006
Expert Alumni

What value do I put for recharacterization of IRA when there's been a loss since orig contribution?

Yes, you would put $1000 for the recharacterized amount even though it is not worth that much.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

2 Replies
JL_Kosa
Level 2

What value do I put for recharacterization of IRA when there's been a loss since orig contribution?

Anyone have any experience with this issue?   I put $1000 for the recharacterized amount, since I'm moving the whole contribution from the Roth to the traditional.  Even though the market value was down, it seems like the logical answer, right?

DaveF1006
Expert Alumni

What value do I put for recharacterization of IRA when there's been a loss since orig contribution?

Yes, you would put $1000 for the recharacterized amount even though it is not worth that much.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Privacy Settings
v