Updated Sunday, August 30, 2015 as of 8:36 PM ET

Ask Ed Slott: IRA Recharacterization Limit?

I converted a regular IRA into a Roth IRA. When doing my tax return, I found that this put me into a higher tax bracket so I recharacterized part of the conversion to what I thought put my taxable income back into the lower tax bracket. However, I now find that the amount I recharacterized was not large enough. Can I recharacterize some more of the conversion to get my taxable income low enough to put me in the lower tax bracket?

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Comments (2)
Re annuity purchase question - I interpreted it to be asking whether annuity distributions could be kept internal as opposed to being paid out to the participant. In the latter case the distributions are, of course, treated separately for RMD purposes and the participant ends up having to take the annuity distribution and an RMD from the non-annuity assets, a total which can be substantially greater than the RMD derived from the total value of the IRA. I've occasionally used annuities within IRAs as fixed income surrogates, and have run into this issue. Some insurers have permitted me to "trap" the distributions, so I presume it is legally permissible, others have not.
Posted by Steve D | Friday, April 25 2014 at 12:43PM ET
Add your comments here.
Posted by brad s | Friday, April 25 2014 at 5:33PM ET
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