In 1998, I converted my Traditional IRA (basis of $22,000) to a Roth IRA (value at conversion = $58,000). In 1999, I recharacterized the Roth IRA back to a Traditional IRA because the value had dropped to $50,000. I realize that I must amend my 1998 tax return to get a refund of the tax on the first installment, but I am unclear as to how to report these transactions on my 1999 return-- Form 8606 doesn't seem to have any line which would reflect that this recharacterization pertains to a 98 conversion, not a 99 conversion. Any help with these forms would be greatly appreciated....

The recharacterization of the '98 conversion in '99 does not affect your '99 return and is not reflected on it, EXCEPT that any 1099R's you receive dated '99 should be reflected in line 15a of the '99 form 1040.



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Barry Picker, CPA/PFS, CFP
New York, NY

Barry, thank you very much for your help.