Message Font: Serif | Sans-Serif
No. of Recommendations: 0
<< 1. Since husband is part of employer's qualified retirement plan and AGI over $150K (filing jointly), the recharacterized Roth to Traditional IRA is allowed, but not deductible, right? >>

Actually, since he's covered by a plan his contribution becomes nondeductible at $61K in AGI. He files Form 8606 to report both the recharacterization and the nondeductible contribution.

<< 2. Since wife NOT part of an employer's qualified retirement plan, her recharacterized Roth to Traditional IRA is allowed, but not deductible either because the AGI is over $150K since filing jointly. >>

This is a phaseout from $150K to $160K, so part may be deductible. BTW, the elibility for Roth contributions is also a phaseout from $150K to $160K, so there might be some Roth contribution allowed, even if the anticipated capital gain comes through. Remember that if the husband can make 401(k) contributions that reduces AGI.

In any case, don't recharacterize until you're sure you will be over the limit. You have until the due date of your 2000 return, with extensions, to complete the recharacterization.

Phil Marti
Tax Preparer
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.