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Financial Planning / Tax Strategies
|Subject: Nasdaq Antitrust payment||Date: 12/27/2000 8:42 PM|
|Author: TMFRadish||Number: 43519 of 122051|
I just got a check from the Settlement Fund in the Nasdaq Market-Makers Antitrust Litigation. You may recall they were accused of...well...spread spreading. The cover letter helpfully states "The tax treatment of this distribution varies based on the recipient's tax status and treatment of their investments. You should consult your tax adviser to determine the tax consequences, if any, of this distribution to you."
OK, gosh, that's helpful. This payment stems from a single stock purchase in 1996. Ordinarily, I'd think this payment would reduce the cost basis of the stock (which I sold in 2000). However, the stock was purchased in an IRA which, subsequently, was converted to a Roth IRA.
So, what's the story on this payment? Can I put it in the Roth IRA? (I'm betting "no" on that one.) Is it taxable, and if so how?
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