Class Action Settlement Reporting?

Jun 16, 2012 6 Replies
J

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

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.

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M

[...]

What does SWMBO say?

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J

I think he was asking SWMBO's opinion on the matter. It's a rare time SWMBO will say we're doing anything right.

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J

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

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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