In view of the decline in the stock market, a taxpayer might wish to reverse a Roth IRA conversion if the value of the assets decreased following the conversion to avoid paying taxes immediately on a depreciating asset. In general, a rollover or conversion to a Roth IRA may be reversed by transferring funds to a traditional IRA by the due date (including extensions) of the taxable year in which the conversion was made. Thus, a 2010 Roth conversion could be reversed as late as October 15, 2011, by a taxpayer who receives an extension of six months from his ordinary filing due date. A taxpayer who makes a Roth conversion followed by a recharacterization may not make another Roth conversion until the later of the taxable year following the taxable year of the initial conversion or, if later, 30 days after the recharacterization.
HLB Gross Collins
Varied