If you did a Roth IRA conversion in 2010, and the value of the Roth IRA has decreased since the date of that conversion, you may be able to recharacterize the Roth IRA to a traditional IRA before October 17, 2011.
Roth IRAs remain a very useful planning tool. However, recent drops in the stock market may cause you to reconsider a 2010 conversion to a Roth IRA. For example, if you converted a $100,000 traditional IRA to a Roth IRA in 2010, and that account is now worth $90,000, you are paying tax on $10,000 that you no longer own.
If you “recharacterize” the Roth IRA to a traditional IRA before the applicable deadline, you will not be required to pay the income tax on the 2010 Roth IRA conversion (or, if applicable, you will be entitled to a refund of the tax you already paid), and your IRA will be treated as a traditional IRA. In other words, by recharacterizing your Roth IRA, the Roth IRA conversion is undone.