I received $276.41 as a result of a class action suit against Countrywide Financial which was finalized last year. My "recognized claim" was $1090. The "pro-ration Factor" was .2535834977 (if that matters). The payment was based on a loss I had with one of their preferreds or notes, but I would have to check the specifics buried in my paperwork.
The accompanying letter only says tax treatment is based on the recipient's tax status and individual circumstances, so I don't have much to go on. Is there any general principle on how these payments are treated? I've seen two suggestions: 1) this is a return of capital or 2) it is an adjustment to the capital loss I recorded in the year I sold it and should be entered on Schedule D as something (?) .
Can anyone direct me more specifically or ask me questions that would clarify where I should be reporting this amount?