Advisor Insights

Where Recharacterization Is Alive and Well

Natalie Choate

Save this column. Someday you will have a client who needs this remedy.

Since 1998 (when Roth IRAs were invented), Section 408A(d)(6) of the Internal Revenue Code has permitted a taxpayer to "recharacterize" his or her IRA contribution. A contribution to a Roth IRA could be "recharacterized" as a contribution to a traditional IRA and vice versa.