Tax treatment of securities litigation settlement


R

rxp2158

On November 8th, 2005 I received a securities litigation
settlement of $63.41 on 700 shares on Teletek which I
originally purchased on 04/15/96 and later sold 07/17/96.
When I do my taxes for 2005 how do I account for this
income?

As Always Thanx in Advance,
 
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A

A.G. Kalman

On November 8th, 2005 I received a securities litigation
settlement of $63.41 on 700 shares on Teletek which I
originally purchased on 04/15/96 and later sold 07/17/96.
When I do my taxes for 2005 how do I account for this
income?

As Always Thanx in Advance,
I would report it as long term capital gain income.
 
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S

Seth Breidbart

On November 8th, 2005 I received a securities litigation
I would report it as long term capital gain income.
I notice that the shares were held short-term. Presumably
they were sold at a loss, but if there were other short-term
gains that year, the taxpayer might well have had a net
short-term gain for the year. In that case, would it be
correct to treat it as short or long term?

Seth
 
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A

A.G. Kalman

On November 8th, 2005 I received a securities litigation
I notice that the shares were held short-term. Presumably
they were sold at a loss, but if there were other short-term
gains that year, the taxpayer might well have had a net
short-term gain for the year. In that case, would it be
correct to treat it as short or long term?
Yes. I missed the fact that the buy and sell took place in 1996.
The character remains the same. Treat it as a STCG.
 
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S

Seth Breidbart

On November 8th, 2005 I received a securities litigation
Yes. I missed the fact that the buy and sell took place in 1996.
The character remains the same. Treat it as a STCG.
Suppose that in 1996, the taxpayer had a net short-term
capital loss, but a larger long-term capital gain. In that
case, had this income been received in 1996, it would have
increased the overall long-term capital gain amount by the
time the netting was done. Is it still short-term gain
today?

Seth
 
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