"rlsusenet[at]NOSPAMPUHLEEZschnapp.org" <NoSuchPerson[at]bigfoot.com> wrote:

- quote -

A technical correction here becomes important as the story
unfolds. YOU own one set of shares, the ones in the
conventional account. Your IRA, a separate legal entity
from you, owns the other set.

- quote -

One check should have been payable to you, the other to the
IRA. The check attibutable to the IRA shares belongs in the
IRA.

Check with your IRA custodian to see whether they can
process the check as is or whether you need to get it
reissued.

--
Phil Marti
Clarksburg, MD

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rlsusenet[at]NOSPAMPUHLEEZschnapp.org <NoSuchPerson[at]bigfoot.com> wrote:

- quote -

Then it's also a withdrawal from the IRA; I'd guess you
should deposit it into the IRA.

- quote -

I'd consider it an adjustment to basis.

Seth

<< ================================================== ===== > << 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. > << ================================================== ===== >

I own shares of a publicly traded company, some of them are
in an IRA, and some are in a conventional account. I have
owned these shares for several years.

A lawsuit against this company, for material
misrepresentation of the value of the company, was settled.
I just received a few hundred dollars split into two checks
(one for each of the two accounts).

Anyone care to venture an opinion on how to treat this
income? I still own these shares.

I'm guessing that I should declare the check for the IRA
shares as ordinary ("other") income.

How do I treat the check for the non-IRA shares? It's kind
of galling to have to treat it as ordinary income when the
shares on which it's based have a considerable unrealized
capital loss.

<< ================================================== ===== > << 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. > << ================================================== ===== >