Tax treatment for SEC market timing award -

[taxquestion]

Client received checks from a mutual fund company for distribution payments from the fair fund established by the SEC in connection with the administrative proceedings -

How do we treat these payments for tax purposes in 2009 - I have not seen a 1099 - but all payments have been accompanied with a statement - saying consult with your tax professional for tax advice.

[Lion]

Guess

This is a real big guess to maybe give you a starting point for research. Maybe a reduction in basis if he still has the securities, and Schedule D income if he's already sold them. There may be a web site for that particular settlement.

[DaveO]

Is this the Invesco Fair Fund? If so it would be taxable if they don't own the securites, and adjustment to basis if they do or should be deposited into an IRA if the investment was an IRA. I got checks for my wife and I and they were labeled as Roth IRA funds.