Natalie Choate, a member of the firm’s Trusts and Estates Department, was quoted by The Wall Street Journal in “A Roth IRA Escape Hatch” on October 5. The article discusses the upcoming October 15 deadline to reverse Roth IRA conversions made in 2011 and the pros and cons of doing so. “Usually you don’t get a mulligan in the tax code, so people should make use of it if they need to,” says Natalie.
A common reason to reverse a Roth IRA is if the account’s value has dropped since the conversion date. However, many markets have risen this year, raising account values and planners are not advising as many Roth reversals as last year. Other reasons to reverse a Roth conversion include investors or advisers having converted different assets into separate Roth IRAs and outside events such as a taxpayers losing a job or having their income reduced. Natalie notes that taxpayers who now are reversing 2011 Roth conversions need only wait 30 days to reconvert the same money. If they use other IRA assets, however, they can convert them right away.
To view the article, click here.