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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120794  
Subject: Re: Roth IRA Excess Contributions Date: 4/6/2001 2:10 PM
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I've decided I want to recharacterize my year 2000 and 2001 contributions to a traditional IRA.

What next?


1. Contact your custodian and do the paperwork to recharacterize. They have the formula for determining the earnings, if that's an issue. (I can't remember whether this is going to be your entire Roths or not.)

2. Once the recharacterization is complete, prepare the following forms:

1. A Form 8606 for each of you. In Part III, enter the amount of your year 2000 Roth contribution on line 18b and the same amount as a negative number on line 18c. The rest is math, assuming there were no pre-2000 Roth transactions.

In Part I of Form 8606 show the amount of the Roth contribution on line 1 if the contribution is nondeductible. (See the table on page 8 of Publication 590 to determine deductibility.)

2. Form 1040 with the total year 2000 amount recharacterized (get this from your custodian) in line 15a and zero in 15b. If any traditional IRA recharacterization is deductible, enter it on line 23.

3. Form 1040X. If your resulting traditional IRA contributions aren't deductible, nothing will change between columns A and C. Just put the numbers down, enter your explanation, showing the earnings or loss between contribution and recharacterization, sign it and mail it.

Your deadline for completing the recharacterization is 10/15/2001.

Phil Marti
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