Discussion:Question regarding the Columbia Fair Fund
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Discussion Forum Index --> Advanced Tax Questions --> Question regarding the Columbia Fair Fund
Discussion Forum Index --> Tax Questions --> Question regarding the Columbia Fair Fund
| 3 April 2008 | |
| I am preparing a return for a long term client who received two checks in June 2007 for a total of approximately $135 from the Columbia Fair Fund, established by the SEC. According to the statement from the Columbia Fair Fund website, the Columbia Fair Fund is a qualified settlement fund and the fund was supposed to pay out investors distribution payments to compensate them for apparent mutual fund poor performance. As my client's payments were from two equity funds from an IRA, do I include the $135 as taxable income? He is in his 40s, so would he have to pay a ten percent penalty? The client did not get a 1099R, as the Columbia Fair Fund was not required to send 1099Rs to the investors. I have never heard of such a situation. Any advice would be appreciated. Thank you. | |
| 3 April 2008 | |
| Kevinh5, I am talking about a serious tax issue, not the city in South Carolina. The Columbia Fair Fund is a fund established with monies paid by the Columbia Management Advisors and Columbia Funds Distributor Inc as ordered by the SEC in 2005. Once again, I need to know if the $135 paid to my client from this fund is taxable income. I do not need any funny answers right now. Kevinh5 if you cannot help me, do not answer my question. If anyone has dealt with clients with similar payouts, I could use your help. Thank you very much. | |
| 3 April 2008 | |
| Lorretta –
There’s a very helpful “tax information” link at www.columbiafairfund.com that covers the exact situation you describe (see the part starting on pg 5). I found it by putting "Columbia Fair Fund" in my search engine - that site is two of the top three hits. You also could have put "Fair Fund" into the search box on this very website and gotten some interesting information. It seems to me that if you don't search before you ask, you can't be too picky about the kind of responses you get. JMHO. | |
| 3 April 2008 | |
| Everyone needs to relax right now. I am doing my best.
Loretta, Kevin was just having fun with you. You also need to consider for $135, is it really worth getting worked up over? Tom | |
| 3 April 2008 | |
| she needs to go to the Greenville County Fair instead of Columbia - she would have fun and loosen up a little | |
| 4 April 2008 | |
| Trillium, I appreciate your assistance. I did go on the columbia fair fund website and read the statement before I posted on TaxAlmanac, as I had the letter my client received with his check. I will assume that the $135 goes on line 21 on the 1040. As for Kevin, I did not realize that you were joking and I apologize. Thank you for your help as well. | |
| 4 April 2008 | |
| What software are you using that it won't help you with this? The tax info pdf on that site clearly says this is taxable and subject to the 10% penalty if your client deposited the checks anywhere but into his IRA. So if he took the cash, enter it into your software just as if he received a 1099-R code 1, and it oughta do the 5329 and put everything where it belongs. Which I don't think will be line 21. | |
