Contributed $2K to Roth IRA, Now AGI over $160

[Guest ml]

I contributed $2k to Roth IRA in Jan. Now our AGI is over $160, I am not eligiable to contribute to Roth IRA. Can I rollover to regular IRA? As my Roth IRA is a stock account. I used $2k to buy stocks which are appreciated to $4k. Can I rollover the stock to regular IRA account or I have to sell my stock and only contribute $2k to regular IRA and pay tax and 10% penaty for the amount over $2K? Any advices are great appreciated.

[BPickerCPA]

What you need to do is do a "recharacterization". You move the entire account into a traditional IRA in a trustee to trustee transfer, or within the same trustee. You can move the stock, and keep the appreciation in the IRA umbrella.