How can I complete an IRA Recharacterization?

What is an IRA Recharacterization?

An IRA recharacterization allows you to reclassify an IRA contribution from one account type to another — for example, moving a Roth IRA contribution to a Traditional IRA, or vice versa. The contribution is moved between accounts, effectively treating it as though it was originally made to the destination account type.

How to Complete a Recharacterization

Follow the steps below to submit a recharacterization request through GalaxyOne.

Step 1: Liquidate the Contribution Amount

Before submitting the form, you must liquidate the exact dollar amount you want to recharacterize in your source IRA account. The funds need to be available as cash prior to processing.

Step 2: Complete the IRA Internal Asset Movement Request Form

Download and complete the attached IRA Internal Asset Movement Request Form. Fill out the following sections:

• Section 1 — Account Holder Information: Your full name, SSN/ITIN, date of birth, email, address, phone, account type, and account number.
• Section 2 — Transaction Type: Select Recharacterization.
• Section 3B — Recharacterization Details: Provide the following:
  • Original contribution type (Traditional IRA or Roth IRA)
  • Original account number
  • Contribution tax year (current year or prior year)
  • Original contribution date and amount
  • Destination account type and account number
• Section 6 — Certification and Authorization: Sign, print your name, and date the form.

Step 3: Submit the completed Form to GalaxyOne Client Services

Once the form is complete, submit it to the GalaxyOne Client Services team via email.

Important Notes

• Tax Advice: GalaxyOne and DriveWealth do not provide tax, legal, or investment advice. Please consult a qualified tax professional before initiating a recharacterization.
• Your Responsibility: You are solely responsible for verifying your eligibility, ensuring compliance with all applicable IRS rules and regulations, and meeting all applicable deadlines.
• Recharacterizations can only be done for the tax year the original contribution was made.
• The deadline to recharacterize is April 15th of the year following the original contribution, or October 15th if you have been granted a tax filing extension.