Due Date ExamplesDue Date Examples

An individual who extended (that is, filed for and received an extension of time to file his tax returns) and filed his income tax return on time has until Oct. 17, 2011 to recharacterize.

An individual who didn't extend the return due date, but filed on time, has until Oct. 17, 2011 to recharacterize.

An individual who didn't extend the return, but didn't file on time had only until April 18, 2011 to recharacterize. So that individual can't now recharacterize.

An individual who extended, but failed to file on time had only until April 18, 2011 to recharacterize. So that individual can't now recharacterize.

The trustee of a trust that converted an inherited qualified retirement plan benefit (for example, an employer-sponsored profit sharing plan, payable on the employee's death to a so-called “see-through” trust¹) has until Oct. 17, 2011 to recharacterize. Note that the recharacterization due date is Oct. 17 even though the trustee can extend the trust's income tax return only to Sept. 15. But the trustee may want the matter settled before Sept. 15, when the return is done, even though recharacterization is possible for an additional month.

The trustee of a trust who has elected to treat the trust as part of a taxable estate² and who has elected a tax year ending in a month other than December must determine in which taxable year of the trust the conversion occurred. The trustee may recharacterize within six months of the due date of the trust's tax return for the tax year when the conversion took place, provided the trust's income tax return is timely filed (including extensions granted).

Example: An employee who participated in a qualified profit-sharing plan dies on Sept. 19, 2010. The employee named a trust as beneficiary of his plan death benefits. The trust qualifies as a “see-through” trust for purposes of required minimum distributions. The trustee of that trust makes a Roth individual retirement account conversion on Dec. 21, 2010 and elects a taxable year ending

Aug. 31, 2011. If the trust's income tax return for the tax year ending Aug. 31, 2011 is timely filed (including timely filing under an extension of time to file actually granted), the trustee has until

June 15, 2012 to recharacterize. But the trustee may want the matter settled before May 15, when the return is due on extension, even though recharacterization is possible for an additional month.

An estate's executor, administrator or other person responsible for filing the decedent's final federal income tax return may elect to recharacterize. Since the recharacterization affects the decedent's final income tax return, recharacterization must be completed by the due date (including extensions) of the decedent's final income tax return. The estate's income tax return due date doesn't control the recharacterization due date.

When a rollover contribution will be recharacterized, the tax year in which the distribution was received controls the due date for recharacterizing and not the date when the rollover contributions occurred. For example, a taxpayer's IRA was distributed to her in December 2010. During January 2011, she made a rollover contribution to a Roth IRA. Because she received the IRA distribution during 2010, her Roth IRA conversion is a 2010 conversion, so she must recharacterize by the due date (including extensions) of her 2010 return and not by the due date of her 2011 return.³