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Discussion Forum Index --> Tax Questions --> SEC Fair Fund
MTX (talk|edits) said:
| 25 March 2008
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| Has anyone else had a client receive a distribution payment from the SEC Qwest Fair Fund? This resulted from an SEC investigation and says it was calculated based on the "loss amounts outlined in the Plan" Just have check stub, no 1099. Stub says to consult tax advisor to determine tax consequences. This tax advisor is stumped. Is it taxable and where to report? About $200.
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MTX (talk|edits) said:
| 26 March 2008
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| So, add to basis or taxable in year received?
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Jctmstx (talk|edits) said:
| 26 March 2008
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| These were punitive damages resulting from a civil penalty of $250,000,000 to shareholders of record. I believe its a capital gain in the year received since its based on a capital asset.
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LSC CPA (talk|edits) said:
| 26 March 2008
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| Just saw this today with a client, similar situation but different company. The website that I was directed to indicated this was not a taxable event but the basis should be adjusted downward. Don't know if that's the same situation for Qwest, but for the co I was referring to, Pilgram Baxter & Associates, it is a basis adjustment. Just thought I'd throw that out there.
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