Message Font: Serif | Sans-Serif
No. of Recommendations: 0
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?


Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.