Tamara converts 50000 from her traditional IRA to her Roth I

Tamara converts $50,000 from her traditional IRA to her Roth IRA on December 15, 2017. The stock market drops substantially in February 2018. Which of the following actions can she elect?

A recharacterize it to her triditional IRA no later than April 15; 2018

B recharacterize it to her triditional IRA no later than October 15, 2018

C recharacterize it to her triditional IRA no later than December 31, 2018

D recharacterize 50% of it to her triditional IRA

Solution

Answer: C recharacterize it to her triditional IRA no later than December 31, 2018

Best option available to Tamara is to recharactarize Roth IRA back to traditional IRA

The due date for reconversion of Roth IRA to IRA is 6 months from the deadline + extensions of date of filing return of income. Assuming Tamara has filed return of income on 15th April,2018 being deadline for such filing, 6 months from such date shall be 15th October 2018.