A friend of mine converted her Traditional IRA to a Roth IRA in 1998 to take advantage of the 4 year spread to report the income. As the market is now in the tank, she is considering recharacterizing the Roth back to Traditional, in order to not to have to continue to pay taxes on the higher conversion amount.

Is this allowable? I have read my various resources and cannot come to a definitive conclusion. I would think that she could do this, and avoid paying the 2000 installment of the conversion, as I believe you have until the due date of your 1040 to accomplish this.

Any help would be appreciated.

Looks like this question is going to come up a lot with the bear size bites taken out of stocks this month. See below reference to the comments from B Picker that addressed this issue. Unless a very substantial amount of money is involved, it just isn't even worth considering... and even then the answer may be no.

http://benefitslink.com/boards/index.php?showtopic=9442