Roth recharacterization | Intuit Community

The solution

From Pub 590:

Recharacterizations
You may be able to treat a contribution made to one type of IRA as having been made to a different type of IRA. This is called recharacterizing the contribution.

To recharacterize a contribution, you generally must have the contribution transferred from the first IRA (the one to which it was made) to the second IRA in a trustee-to-trustee transfer. If the transfer is made by the due date (including extensions) for your tax return for the year during which the contribution was made, you can elect to treat the contribution as having been originally made to the second IRA instead of to the first IRA. If you recharacterize your contribution, you must do all three of the following.

Include in the transfer any net income allocable to the contribution. If there was a loss, the net income you must transfer may be a negative amount.

Report the recharacterization on your tax return for the year during which the contribution was made.

Treat the contribution as having been made to the second IRA on the date that it was actually made to the first IRA.

No deduction allowed. You cannot deduct the contribution to the first IRA. Any net income you transfer with the recharacterized contribution is treated as earned in the second IRA. The contribution will not be treated as having been made to the second IRA to the extent any deduction was allowed for the contribution to the first IRA.

My understanding: $6,000 is recharacterized. $550 will count as being earned in the Traditional IRA and will not be taxed until it is withdrawn.

On the IRA Contributions Worksheet, Enter the Roth Contribution on line 21 then the recharacterization on line 24. Line 15 should automatically show the Non-deductible Traditional Contribution.