Important: The Tax Cuts and Jobs Act of 2017 repealed the option to recharacterize Roth conversions, for Roth conversions done after 2017. As such, only regular contributions to traditional IRAs and Roth IRAs may now be recharacterized.
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Steps
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What to do
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How it is done
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Input results here
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Step 1:
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Calculate the adjusted closing balance
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Step 2:
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Calculate the adjusted opening balance
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Step 3:
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Subtract the adjusted closing balance from the adjusted opening balance
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Adjusted closing balance – adjusted opening balance
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Step 4:
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Divide the results from step 3 by the adjusted opening balance
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(Adjusted closing balance – adjusted opening balance)
Adjusted opening balance
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Step 5:
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Multiply the results from step 4 by the Roth conversion amount that is being recharacterized
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(Adjusted closing balance – adjusted opening balance)
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x
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Conversion
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Adjusted opening balance
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The results from step 5 is the NIA
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Step 6:
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Subtract the results from Step 5 from the conversion amount
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Value of conversion ( when conversion occurred) + NIA
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The result from step 6 is the market value of the assets that should be recharacterized.
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