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Old 04-23-2016, 01:08 AM
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Proceeds From a Class Action

First time poster, hope I chose the right category. Anyway I tried to play the markets, invested in a company, they lied about stuff, lost a bunch of cash, class action started, and I just got paid. From the letter it says its a "qualified settlement fund" being issued for the defendant violating Federal Securities Law.

Thats the background. I purchased stock in my Roth IRA and my personal account. I claimed the losses posted to my personal account 2 years ago but couldn't claim my Roth losses (at least I don't think I could). The settlement came in two checks to me, one for personal losses one for Roth. I'm pretty sure I have to pay 15% for the personal portion, but do I have to pay any tax on the Roth portion since I never claimed losses on it? Any information would be appreciated. Thanks in advance.



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Old 04-23-2016, 02:28 PM
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Originally Posted by icewing726 View Post
First time poster, hope I chose the right category. Anyway I tried to play the markets, invested in a company, they lied about stuff, lost a bunch of cash, class action started, and I just got paid. From the letter it says its a "qualified settlement fund" being issued for the defendant violating Federal Securities Law.

Thats the background. I purchased stock in my Roth IRA and my personal account. I claimed the losses posted to my personal account 2 years ago but couldn't claim my Roth losses (at least I don't think I could). The settlement came in two checks to me, one for personal losses one for Roth. I'm pretty sure I have to pay 15% for the personal portion, but do I have to pay any tax on the Roth portion since I never claimed losses on it? Any information would be appreciated. Thanks in advance.
yes unless you close the ira account, even if you did not claim the loses on your return, you do need to report it on your return as taxable income;say, the value of your investments in a R-IRA decreases, you might wonder if there is a way to write off those losses on your federal income tax return. Having made it a point to carefully grow your retirement fund, when the value of your investments in a R-IRA decreases, you might wonder if there?s a way to write off those losses on your federal income tax return. The irs does not permit you to deduct losses from your R-IRA on a year-to-year basis, so the only way to deduct your losses is to close your R-IRA accounts;so . To qualify for the deduction, you must close all of your R-IRA accounts, including R-IRA accounts that have profits. You claim the loss as a miscellaneous itemized deduction, subject to the 2%-of AGI limit that
applies to certain miscellaneous itemized deductions on Sch Aof Form 1040.



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