| | Won Settlement against Stock Broker
I was awarded $100K for stock broker misconduct.
My brokerage account has unrealised loss of $250K.
Still holding till who knows when...
Is the cash settlement considered ordinary income,
or is it return of capital, or capital gain which could
be offset by capital loss if I sold losers to generate
a taxable event?
Is the settlement linked to my capital loss by means
of the settlement's basis and origin of claim?
What is proper tax treatment for my award?