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Reconversions

A retirement reconversion is an act of converting a previously recharacterized contribution.

This is may sound a bit confusing, so just do your best to follow…

If a client converts a Traditional IRA or Simple IRA portion into a Roth IRA, but later changes their mind, then they may recharacterize their retirement account back to a Traditional/Simple IRA.

If a client then decides they would like to reconvert the funds to a Roth, they may do so, but they must wait until the latter of 30-days after the recharacterization or January 1st of the following year.

For example, if you were to convert in May and recharacterize in October, you could choose to reconvert after January 1st.  However, if you waited until December 15th to recharacterize you would have to wait 30 days to reconvert because 30 days would be later than January 1st of the following tax year.

If you have questions, be sure to speak with a CPA or tax professional.

Terry White

About Terry White

I started my business career after getting my degree in Accounting from the University of New Mexico in 1983. My first job was as a controller for a local title company, and in 1987 I started First Financial Escrow, Inc. Over the years I played a part in several startup companies including First Financial Equities, Inc., First Financial Trust, Inc., First Financial Marketing, Inc. and Asset Ventures, Inc. In 1997 First Financial Escrow, Inc. was able to purchase the escrow accounts from Sunwest Bank and changed its name to Sunwest Escrow. As the market changes, Sunwest has grown and changed along with it. Besides my wife, Sheila, we have three boys, two daughters-in-law, one grandson, another grandson on the way and a future daughter-in-law. Sunwest is my passion, and I enjoy coming to work every day to see what will happen next. I enjoy fly fishing, spending time in Colorado, biking and watching my boys play soccer.