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February 16, 2009

Reconversion

Your Guide

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Definition

A conversion of an amount that was previously converted and subsequently recharacterized.

An IRA owner who converts an amount to a Roth IRA during any taxable year and recharacterizes the amount, may not reconvert the amount before the later of the following :

  • January 1 following the taxable year in which the amount was converted to a Roth IRA or
  • The end of the 30-day period beginning on the day on which the amount was recharacterized

If the amount is reconverted before this period it a failed conversion

Referring Cite

Treas. Reg. §1.408A-5, Q&A-9(a)(1)

Additional Helpful Information

  • A failed conversion is subject to correction VIA a recharacterization
  • If the failed conversion is not recharacterized, it is treated as a regular distribution from the Traditional, SEP or SIMPLE IRA and a regular contribution to the Roth IRA, subject to the regular IRA contribution limit

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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