recharaterizing a roth if 1988 return was filed Aug 16th, still time?

[Guest davelc]

I filed my return in August and now would like to recharaterize my Roth due to how the market has affected my Roth. Is this possible or must I have filed by April 15th? If it possible is the only thisng I would lose would be the 4 year spread?

[BPickerCPA]

It is possible to do a recharacterization up to October 15th, even if you already filed. If you do recharacterize, any conversion you do after that counts as a 1999 conversion.

[John G]

Unless your conversion assets have shrunk substantially, it is probably not a good idea to try and recharacterize in the next two days. Reason: you may not be able to qualify for a conversion in the future either because of income or changes in the rules. You also may find it difficult to get your custodian to process your account in a timely fashion. Also, the market swings may catch you a second time when you attempt to convert again so you taxes could still be higher. The custodian sets the effective date of your conversion (not you) based upon the date the accounting dpt finally processes your paperwork. Your "costs" can also shift if you have a change in tax brackets between 1998 and when you convert again.

Add in you tax prep fees, the value of your time, etc. Is it still worth it? I hope my cautionary notes are helpful.

[John G]

Note IRS notice that recharacterization deadline has been relaxed to the end of 1999. See other listing on this message board.

[Guest cmarshall]

Announcements 99-57 and 99-104 both extended the date to recharacterize your contribution or conversion. However, both announcements stated that you MUST have timely filed your return by April 15 in order to take advantage of the extensions. If you had originally applied for an extension until August, that is the date you would have had to recharacterize by.

[BPickerCPA]

[[Announcements 99-57 and 99-104 both extended the date to recharacterize your contribution or conversion. However, both announcements stated that you MUST have timely filed your return by April 15 in order to take advantage of the extensions. If you had originally applied for an extension until August, that is the date you would have had to recharacterize by.]]

This is WRONG! The Announcements stately simply that you must have timely filed your return. A return filed on a valid extension is still timely filed. Anyone who has filed their tax return on or before October 15, 1999, and had a valid extension (if filed after April 15, 1999) is covered by the two announcements, and has until December 31, 1999 to do a recharacterization!