Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: TMFExRO Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121568  
Subject: Re: recharacterization & taxes due Date: 3/28/2000 6:19 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
<< In September of 1999, I had a traditional IRA and a Roth IRA. I decided to convert the $1711 from IRA into Roth IRA. Of course, my AGI went over $100,000 and now I must recharacterize (I like to call it de-rothing). >>

I like that.

<< My question is, I am using MacIntax software, and on the Mass return, it is recording the $1711 distribution as income. Do I still have to pay taxes on this as a distribution even though I am having it recharacterized? Can I ignore the 1099-R from this distribution or do I enter it and pay taxes? If so, do I get to deduct next year? >>

Ah, software. You don't tell me how this looks on your 1040. (It should be $1711 in 15a and -0- in 15b.) There should also be a Form 8606 which shows both the conversion and the recharacterization. Unless there's something weird in MA law that doesn't recognize recharacterizations, this shouldn't affect your state return.

<< Also, my tax software wants to know the total value of the account as of December 31, 1999. Since I already had valid ROth Ira money in this Roth account, that value would be inflated as far as what the traditional IRA would be worth had it not been converted at all. >>

Sorry, can't help you with this one, because I don't know why the software wants to know. The best I can suggest is to complete the recharacterization (the earnings have to be recharacterized too), finish up and print out the return, and if you have questions, come back with the specifics of what doesn't look right.

TMF ExRO
Phil Marti
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Disclaimer:
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.
Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
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.
Post of the Day:
Macro Economics

Economic Implications of Cuba
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! 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.
Advertisement