MargaretMort Posted June 9, 2011 Report Share Posted June 9, 2011 I have asked this question before and received no answers. I am hoping that now that things have settled down I will get some answers or suggestions. Client mistakenly reported rolling an IRA into a Roth in 2009 to take advantage of low income. In fact, the roll over took place in early 2010. The tax consequences of this are way more than they want to pay so they have rolled the roll-over to the Roth back to the original IRA. The 2009 tax return has been amended and sent to the IRS. The 2010 tax return is on automatic extension. I have read everything I can get my hands on about recharacterizing and truly don't know exactly how to proceed. Do we send to 2010 showing the roll-over now and then amend it before Oct. showing it has been changed? The TP just received the 5498 for 2010 and is very worried about the entire situation. I sure don't want to do it incorrectly now. Any help will be greatly appreciated. MM Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted June 9, 2011 Report Share Posted June 9, 2011 So it all happened in 2010? Or was it to the Roth in 2010. then re-characterized in 2011? Quote Link to comment Share on other sites More sharing options...
MargaretMort Posted June 10, 2011 Author Report Share Posted June 10, 2011 Sorry, It has been recharacterized in 2011 but I am under the impression that as long as this is done by Oct 2011 it is as if the roll-over never occurred. The original roll-over occurred in March or April of 2010 but was erroneously reported on the 2009 tax return. The roll-over is reported on the 2010 tax return which has not been filed. That is why I am unclear about how to go forward, file 2010 and then amend? File 2010, leave off the reporting the roll-over and explain with a letter? I don't know about anyone else but I am confused. MM Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted June 11, 2011 Report Share Posted June 11, 2011 OK, that helps. Given those facts, I'd amend the 2009 to remove the entire transaction, then for 2010 I would enter the rollover transaction to the Roth on the 2010 and ALSO, on the same return, make another entry showing that rollover being recharacterized. I'd include a statement explaining the facts, which the software will allow you to do, if you use ATX. If not, I'm sure your software will allow it somehow. Quote Link to comment Share on other sites More sharing options...
MargaretMort Posted June 11, 2011 Author Report Share Posted June 11, 2011 Thank you. I will try to do that tomorrow and see what happens. Yes, I do use ATX. MM Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.