IRA Rollover

Archive for May, 2009

Question: If I convert Rollover IRA to Roth in 2007 but then recharacterize in 2008, is conversion still taxable in 2007?

I converted my rollover IRA to a Roth in 2007 but then recharacterized back into a rollover IRA in 2008. Do I still have to report the original rollover as taxable income on my 2007 tax return? I’ve read the Instructions to Form 8606 where on page 3 it states I must still report the rollover amount on line 15a but it doesn’t state whether I must also report it as taxable income for 2007 on line 15b.

Answer: You report it on 15a because the IRS computer is going to look for it. If you successfully undid all of the money, you put $0 on line 15b.

IRA, 401k Rollover, Financial Planning Atlanta Questions