Recharacterization
Definition of 'Recharacterization'The treatment of a contribution as being made to another type of IRA instead of the IRA to which the contribution was initially made. |
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Investopedia explains 'Recharacterization'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). |
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