Recharacterizing Conversion to a Roth

[Guest NPMaxwell]

In 1998 I converted a traditional IRA to a Roth IRA. I spread out the IRA distribution over 4 years for tax return purposes. The fund that i had converted to has gone down by 40%. (It was a heavy tech fund). I have not made any further Roth contributions to this fund(needless to say). Am I able to recharacterize my year 2001 IRA distribution so that I am reporting less than the $2500 that I've been reporting annually over 3 years or was the recharacterization only available to the entire conversion amount in 1998 to be recharacterized by the end of 1999? I've asked a financial advisor whose not sure and he advised that I come to this site for a clarification. Comments will be appreciated.

[Appleby]

You had up to December 1999 to recharacterize all or a part of your 1998 conversion.

The IRS has granted exceptions to some individuals. Some of these exceptions extend the deadline even up to this year. However, it appears that these extensions are grated in cased where the recharacterization was required to be done because the IRA owner was ineligible to do the conversion (example, exceeded the $100,000 MAGI limit)- not just became the IRA owner wanted to recharacterize because of devaluation or just for the hell of it.