How to Correct a failed conversin from a Qualified Plan in 2008 and beyond?

[jevd]

Has anyone thought how a failed or ineligible conversion from a Qualified Plan to a Roth IRA will be re-characterized? I know this is a 2008 issue.

1. Return to QP with gains/losses? ( but what if the qp is terminated?)

2. Re-characterize to a Traditional IRA? But then how is it reported on form 5498?

Just something to think about when we have nothing else to do. Whenever that is.

[Appleby]

It is something that I have seen occurring only too often- but I do not recall seeing anything citable that addresses how it can be corrected.

It seems that it is an ineligible rollover to the Roth IRA , subject to correction as a return-of-excess., and a regular distribution-includible in income-from the QP.

If the plan processes the transaction as a direct rollover, per the participant’s instructions, I don’t think they are required to –or would even consider taking back those assets.