jevd
Feb 16 2007, 06:21 PM
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
Feb 16 2007, 07:21 PM
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.