Recharacterizing Roth IRA after Rollover?

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Topic Author
Cruz
Posts: 134
Joined: Sun Mar 30, 2014 7:16 pm

Recharacterizing Roth IRA after Rollover?

Post by Cruz » Thu Jan 10, 2019 1:00 pm

This may be unrealistic but...I unfortunately rolled over my 401k and converted it to a Roth IRA this time last year when markets were at their peak and have subsequently lost money. I'm only in Vanguard Total International Stock Index Fund Admiral Shares and Vanguard Total Stock Market Index Fund Admiral Shares but at an average share price of $32.38 and $70.67, respectively.

I converted part of the rollover to fill my 2017 tax bracket and converted the rest in 2018. Is there anything I can do that would make sense tax wise to sell the shares and reinvest at a lower cost per share to possibly reduce 2018 taxes and own the shares at a lower share price? I know it is only a year but looking at the 5 and 10 year averages of these funds, I invested at all time highs :|

Silk McCue
Posts: 2635
Joined: Thu Feb 25, 2016 7:11 pm

Re: Recharacterizing Roth IRA after Rollover?

Post by Silk McCue » Thu Jan 10, 2019 1:17 pm

With the new tax law you can longer reverse a Roth Conversion. There is nothing you can do at this point.

I converted a nice chunk in Dec 2017, then in 2018 in a couple of transactions in Oct and Nov, and just did my 2019 conversion this week. I don't look back and wonder why the market did what it did and try to imagine a better outcome if I had done something else and neither should you.

Put it out of your mind and Stay the Course.

Cheers

Topic Author
Cruz
Posts: 134
Joined: Sun Mar 30, 2014 7:16 pm

Re: Recharacterizing Roth IRA after Rollover?

Post by Cruz » Thu Jan 10, 2019 1:46 pm

Silk McCue wrote:
Thu Jan 10, 2019 1:17 pm
With the new tax law you can longer reverse a Roth Conversion. There is nothing you can do at this point.

I converted a nice chunk in Dec 2017, then in 2018 in a couple of transactions in Oct and Nov, and just did my 2019 conversion this week. I don't look back and wonder why the market did what it did and try to imagine a better outcome if I had done something else and neither should you.

Put it out of your mind and Stay the Course.

Cheers
Yeah I was just googling around and found this about the new tax law...I guess there are no other options, right?
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