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IRA RECHACTERIZATION AMOUNT NOT BEING REPORTED ON LINE 4A

SL
Level 3

Taxpayer made roth ira contributions in 2018 and recharacterized the contributions to a  traditional ira before 4/15.  I believe the amount should be included on line 4a but proseries is not including it there?

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itonewbie
Level 15

Assuming your client contributed to the Roth IRA and the contribution along with accrued earnings/losses are to be recharacterized to a traditional IRA before the due date, you don't need to report the distribution on Line 4a (given the recharacterization happens in 2019) on either the 2018 or 2019 return but should attach a statement to explain the recharacterization and amounts involved.  You can see the instructions on F.8606 for more details: https://www.irs.gov/instructions/i8606#idm140149371801472

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itonewbie
Level 15

Assuming your client contributed to the Roth IRA and the contribution along with accrued earnings/losses are to be recharacterized to a traditional IRA before the due date, you don't need to report the distribution on Line 4a (given the recharacterization happens in 2019) on either the 2018 or 2019 return but should attach a statement to explain the recharacterization and amounts involved.  You can see the instructions on F.8606 for more details: https://www.irs.gov/instructions/i8606#idm140149371801472

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Still an AllStar
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itonewbie
Level 15
Edited to clarify reporting on Line 4a vs statement.
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qbteachmt
Level 15

The tax reform bill has removed the ability to recharacterize any Roth IRA conversions done in 2018 and onward.

https://www.irs.gov/retirement-plans/ira-faqs-recharacterization-of-ira-contributions

https://www.forbes.com/sites/jamiehopkins/2018/01/04/tax-reform-changes-to-recharacterizations-and-r...




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itonewbie
Level 15
TCJA only prohibits recharacterization of Roth Conversion.  Recharacterization of Roth contribution is still allowed.  See §408A(d)(6)(B)(iii).
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SL
Level 3
recharacterization of contributions is allowed,. however, you didn't answer my question, amount should be included on line 4a and proseries is excluding
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qbteachmt
Level 15

You just started this same topic as a duplicate.

I recommend you confirm if you have a Recharacterization, or a Conversion (such as Backdoor Roth).

I posted those article links for you to read.

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qbteachmt
Level 15
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