chicago.imran[at]gmail.com wrote:

- quote -

The character does not change. Unless some part of the amount
received has been identified as interest, you can treat the
amount as long term capital gain income that gets reported on
Schedule D.

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I received a settlement check for a class action law suit
related to being misled into the purchase of a security by
the firms executive team.

The check included this statement:
The "In re Universal Access, Inc., Securities Litigation"
Settlement Fund is a "Qualified Settlement Fund", as defined
in Treas. Reg. Section 1.468B-1 through 5. Please note that
the regulations provide in part that "whether a distribution
from a QSF is included in the claimant's gross income is
generally determined by reference to the claim in respect of
which the distribution is made and as if the distribution
were made directly by the transferor." The claims upon
which the "In re Universal Access, Inc., Securities
Litigation" Settlement Fund were based involved claims,
filed under federal securities laws, that members of the
Class were misled into purchasing Universal Access common
stock at artificially inflated prices.

Does this income need to count as gross income or can it
count as capital gains? I suffered huge capital losses from
purchasing this security so it seems to me that this income
could be counted against those losses which I have been
carrying over year to year.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >