Author Topic: 2016 recharacterization shown as 2017 contribution  (Read 1352 times)

Spork

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2016 recharacterization shown as 2017 contribution
« on: April 23, 2017, 10:09:11 AM »

This is the first time I have done a recharacterization... so maybe this is just normal and how it looks.  But it looks odd to me.

Details:
In December 2016 I did a Traditional->Roth conversion at Vanguard.  It shows up in 2016 tax year on the Roth as "rollover contribution". 

Early in 2017, I realized I was about to have some unexpected income attributed to 2016.  I decided to recharacterize the Traditional->Roth back into the Traditional IRA.  I talked with them on the phone and they pushed it back.  Fine.

Now when I look at Vanguard, I see for tax year 2017:
Rollover contributions into the Traditional IRA and distributions from the Roth IRA.

Is that normal for it to show up in the 2017 tax year?  It was done in the first week of January 2017, so ... it was done in 2017.  But it applied to the 2016 tax year and I accounted for the recharacterization in my 2016 taxes.

johnny847

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Re: 2016 recharacterization shown as 2017 contribution
« Reply #1 on: May 01, 2017, 04:26:05 PM »
Yes, it's normal to show up in the 2017 tax year. All of that is based on the cash date, not the accrual date.

So long as you accounted for the rechar, and more importantly, attached a statement to your tax return explaining your rechar as the instructions tell you to do, you're fine. You'll be getting forms from Vanguard (1099R and 5498 iirc) which state that you withdrew money from your Roth and contributed to your traditional, but you're not supposed to do anything with them for 2017 taxes because you already accounted for it in 2016.

Spork

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Re: 2016 recharacterization shown as 2017 contribution
« Reply #2 on: May 01, 2017, 04:35:25 PM »
Yes, it's normal to show up in the 2017 tax year. All of that is based on the cash date, not the accrual date.

So long as you accounted for the rechar, and more importantly, attached a statement to your tax return explaining your rechar as the instructions tell you to do, you're fine. You'll be getting forms from Vanguard (1099R and 5498 iirc) which state that you withdrew money from your Roth and contributed to your traditional, but you're not supposed to do anything with them for 2017 taxes because you already accounted for it in 2016.

This was my assumption...  I guess I just wanted someone to confirm it.  Thanks.

 

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