Class Action Settlement Reporting?


J

jeff_wisnia

I've invested in a lot of securities over the years, and for the past
ten years or so I've received about six new class action notices a year.
I answer all of them and from time to time I've actually received a
settlement check, sometimes large enough to take SWMBO out for an
expensive meal.

These class actions without exeption are for securities I bailed out of
years ago and for which I'd reported capital losses for the the year in
which their sale took place.

I've reported the few settlement payments I've received as long term
capital gains in the year in which they were received.

Am I doing things correctly?

Thanks guys,

Jeff
 
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A

Alan

I've invested in a lot of securities over the years, and for the past
ten years or so I've received about six new class action notices a year.
I answer all of them and from time to time I've actually received a
settlement check, sometimes large enough to take SWMBO out for an
expensive meal.

These class actions without exeption are for securities I bailed out of
years ago and for which I'd reported capital losses for the the year in
which their sale took place.

I've reported the few settlement payments I've received as long term
capital gains in the year in which they were received.

Am I doing things correctly?

Thanks guys,

Jeff
Yes assuming the securities were not held in a retirement account(e.g.,
an IRA). I'll assume they weren't as you stated that you had taken
capital losses.
 
J

jeff_wisnia

Alan said:
Yes assuming the securities were not held in a retirement account(e.g.,
an IRA). I'll assume they weren't as you stated that you had taken
capital losses.
Yep, I did participate in a class action settlement related to an
investment in my regular IRA and sent the amount I received to the
investment firm handling that IRA with instructions to just return the
funds to the account, but not as a "contribution", which they did.

Thanks,

Jeff
 
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T

Tom Healy CPA

I had one of those earlier this year, which surprisingly returned about 30% of the investment. The custodian had a term, 'litigation' to code the deposit.
 

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