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#1166866 - 04/20/09 09:23 PM IRA question - Roth recharacterization
Jake C Offline
New Poster
Joined: Sep 2008
Posts: 12
I hope this is the right place for this kind of question. I have an elderly customer who for some reason transfered her SEP IRA from Bank A to our bank and transfered it in as a Roth. She got hit with a 7k tax bill which she thinks is all because of this IRA. She talked to the IRS and now she is talking about a recharacterization. I am wondering if anyone has dealt with this before? I have been reading on the internet and it looks like she cannot do it, but I cannot find a good source to help her.

Can anyone help me?

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General Discussion
#1166888 - 04/20/09 09:47 PM Re: IRA question - Roth recharacterization Jake C
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,685
Illinois
I would suggest she find a good tax attorney or accountant. Bankers are not certified accountants and should not give tax advice as they can be held liable by the customer if we get it wrong.
Publication 590

The above link will direct you to the IRS publication on IRA's. It makes for some good reading on a sleepless night...
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#1167086 - 04/21/09 02:51 PM Re: IRA question - Roth recharacterization BrianC
Jake C Offline
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Joined: Sep 2008
Posts: 12
Thank you crowman3 .. I have been preaching that to her over and over again telling her I am not an accountant. If a recharacterization is what she wants that is fine and I am more than happy to oblige her, but please make sure that is what she wants before I change it and cause her possibly more tax headaches.

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#1170358 - 04/27/09 11:10 AM Re: IRA question - Roth recharacterization Jake C
nbk2yj2 Offline
Platinum Poster
Joined: Aug 2006
Posts: 629
Paradise!
I am not an accountant, just a certified IRA specialist. That and 1.00 will get me a cup of coffee, i suppose. FYI, As long as she filed her taxes in a timely manner yes, she can recharacterize the apparent conversion up until the extended due date of 10/15/09 for a 2008 conversion. She will have to amend her return. She can explain the conversion and recharacterization dates and amounts on the 1040X. With that said let her discover what she needs to do from her accountant as crowman3 has suggested.

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#1178544 - 05/07/09 08:57 PM Re: IRA question - Roth recharacterization nbk2yj2
EdieT Offline
Member
EdieT
Joined: May 2009
Posts: 76
PA
I also agree with nbk2yj2 & crowman3. Iworked for 2 banks & a tax preparer & I saw recharacterizations at all 3.

Make sure she uses her accountanct. The bank MUST NOT give tax advice.

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