IRA Monte Carlo (hacking the performance of your retirement account)

Here's a more detailed version of the example:

1. Single IRA ABCD worth $4 million dollars 2. IRA ABCD split into 4 1 million dollar IRAs: IRA A, IRA B, IRA C, IRA D

3. Investor converts IRA A, IRA B, IRA C, and IRA D to Roth IRAs in January 2012 (conversion counts again 2012 taxes)

4. Before April 15 2013, investor extends their tax return to October 15 2013

5. In October 2013 investor notices IRA B and IRA C had losses so they decide to recharacaterize their Roth IRA conversion (undo it)

6. Investor files their tax return by October 15 and only pays taxes on the conversion of IRA A and IRA B into Roth IRAs.

I think the "21 months" mentioned in the article is specific to this case. I believe recharacterization of a Roth conversion must occur before filing taxes for the conversion. So if the investor converted their traditional IRAs to Roth IRAs in December 2012, the conversion would count against 2012 taxes and they would still only have until October 15, 2013 (10 months).

There are multiple potential benefits from this, the most obvious one being that if the investor then converted IRA B and IRA C to Roth on October 16, 2013 they would owe less taxes since the values of those accounts has gone down.