Recharacterization

Recharacterization

The treatment of a contribution as being made to another type of IRA instead of the IRA that the contribution was initially made.

Notes:

For instance, an individual may make a participant contribution to a Traditional IRA, but may later recharacterize the contribution to a Roth IRA.

Roth IRA conversions can be reversed by means of a recharacterization, however, this movement of assets must include earnings (or losses).

See also: In-Service Withdrawal, IRA, IRA Conversion, IRA Adoption Agreement and Plan Document, Non-Qualified Distribution, Ordering Rules, Qualified Distribution, Reconversion, Required Minimum Distribution, Roth IRA, Spousal IRA, Triggering Event

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Recharacterization

The reversal of a traditional IRA contribution or conversion into a Roth IRA, or vice versa.