Comments on: Unconvert A Roth IRA Conversion

By: Money Hacks Carnival #29: Food Heaven | LivingAlmostLarge

Money Hacks Carnival #29: Food Heaven | LivingAlmostLarge — Wed, 10 Sep 2008 12:08:24 +0000

[...] suggests not using a Roth IRA in this market in Unconvert A Roth IRA Conversion posted at My Retirement Blog. I asked the question how do you save on taxes really? Just not paying [...]

By: retirehappy

retirehappy — Sat, 06 Sep 2008 20:36:27 +0000

You save because you would be converting a lower amount since you lost money on the initial conversion amount.

If you had 10k and converted, you owe taxes on that 10k. If you later you foudn you lose 2k, you recharacterize it, then convert only $8k later on. That way you save on taxes on 2k.

By: LAL

LAL — Fri, 05 Sep 2008 13:14:57 +0000

Why would you save on taxes by recharacterizing?

By: » Recharacterize & Reconvert a Losing Roth IRA on Daily Money Hack

Tue, 19 Aug 2008 10:42:17 +0000

[...] converted your Traditional IRA to a Roth IRA last year (2007) and your Roth IRA lost value, you can “recharacterize” the conversion back to a Traditional IRA, wait a month, then convert again so that the cost basis of the conversion is [...]