Roth IRAs : Converting, Recharacterizing and Reconverting  

Oleh:

Johnson, Linda M.

Jenis: Article from Bulletin/Magazine
Dalam koleksi: Journal of Accountancy vol. 188 no. 2 (Aug. 1999), page 75.
Topik: ira; IRA s; converting; characterizing; converting

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ85.9 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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If Roth IRA s are such a good idea, why undo a Roth IRA conversion ? For a better bottom line, of course. Under some circumstances, such "recharacterizing" can result in significant tax savings. Although much has been written about the tax benefits of Roth IRA s, including the choice qualifying tax payers have to convert traditional IRA s to Roth IRA s, one feature - passed as part of technical corrections to the Taxpayer Relief Act of 1997 (TRA '97) - has received considerably less attention. It allows taxpayers to undo Roth IRA conversions if circumstances warrant it. For certain clients, CPA s will find taking this step can make a good thing even better. Examples included in this article demonstrate the various uses and timing of conversions, recharacterizations and reconversions. Clients should consider recharacterizing a Roth conversion when there has been a post conversion decline in the market value of the Roth IRA. The client anticipates a lower tax rate to apply in the year after converting to a Roth IRA. A recharacterization also is appropriate if the client needs to correct a failed or invalid Roth conversion.

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