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Author: mwgregory Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75838  
Subject: Roth IRA - contributed too much Date: 12/14/2000 3:03 PM
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I contributed $2000 to my Roth at the beginning of 2000, but it is now looking like I might have more adjusted gross income than I expected, which would such a contribution not permitted. I understand from IRS 590 that I might be able to recharacterize the contribution to a regular IRA (non-deductible), as long as I also transfer any net income associated with that contribution.

I have a few questions:

*Can I recharaterize only a portion of the $2000 contribution (and a pro rated share of the net income), or do I have to recharaterize the entire amount?

*Would it be better to apply the excess contribution to a later year (as mentioned on page 38 of IRS 590).

*How much of a pain is this with the trustee (I use Schwab)?

Any advice on this would be appreciated.
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26616 of 75838
Subject: Re: Roth IRA - contributed too much Date: 12/14/2000 4:32 PM
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Greetings, Mwgregory, and welcome. You asked:

*Can I recharaterize only a portion of the $2000 contribution (and a pro rated share of the net income), or do I have to recharaterize the entire amount?

Assuming you're in the phase-out range for Roth contributions based on your AGI and filing status, then you may recharacterize the part of your original contribution that is now considered excess. However, if you have exceeded the upper limit for a contribution, then you must recharacterize the entire contribution.

*Would it be better to apply the excess contribution to a later year (as mentioned on page 38 of IRS 590).

That's up to you. As long as you recharacterize after January 1, 2000, then certainly you could say the excess contribution should be applied to a 2001 contribution.

*How much of a pain is this with the trustee (I use Schwab)?

That question is best asked of Schwab, not us.

Regards..Pixy


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