Roth recharacertization followed by another conversion & caretaker error

[Guest rrmiller]

I converted all assets in a Rollover IRA account to Roth in September 2008. I recharacterized the entire Roth account back to a Rollover IRA account on 14Jan09. I want to convert this "recharacterized" IRA account again to a Roth account, but I know I must wait 30 days, with the first day starting at 14Jan09. Is the first day I can convert the IRA account to a Roth account, Friday 13Feb09 or is it a day later (which would actually make it Tuesday 17Feb09 given the holidays)? I am told by the trustee that it is a day later, but it looks to me that it should be Friday 13Feb09.

Another twist. When I did the first conversion in Sept08, my trustee, Fidelity, set a flag on the account to pickup later dividends/etc that came in to the Rollover IRA account to move them into the Roth account automatically--some dividends which did come in a week later. However Fidelity forgot to clear that flag. Thus, when I did the recharacterization on 14Jan09, on 15Jan09 (unknown to me), Fidelity automatically converted the day-before recharacterized funds back into the Roth account! I noticed this 11Feb09, notified Fidelity, and they put the funds back into the Rollover IRA account as of 12Feb09. I assume that Fidelity's error will not affect my timings (which is what Fidelity is saying) and that I can now convert this IRA to a Roth on Friday, 13Feb09, the 31st day after 14Jan09, starting with day 1 as 14Jan09. Am I correct in my assumption, or does the trustee's error mean I must wait to a later date to do the conversion to a Roth?

Thanks--unsure

[Appleby]

The 30-day period begins on the day of the recharacterization. In your case , you would be eligible to reconvert today- the 13th.

Regarding the error, the correction should have been just that ‘ and adjustment’ and not a re-do of the recharacterization, so it should not affect your deadline. Check with the IRA custodian and make sure that the Fed12 transactions are not reportable transactions- which means you should not get a 1099-R or 5498 for the asset movement.

[Guest rrmiller]

The 30-day period begins on the day of the recharacterization. In your case , you would be eligible to reconvert today- the 13th.

Regarding the error, the correction should have been just that ‘ and adjustment’ and not a re-do of the recharacterization, so it should not affect your deadline. Check with the IRA custodian and make sure that the Fed12 transactions are not reportable transactions- which means you should not get a 1099-R or 5498 for the asset movement.

Thank you. I did and they verified what you said.