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Posted by Ray on November 14, 2007, 1:39 pm
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A few years ago I held some shares in Royal Ahold, a Netherlands-based
company which at that time owned Giant supermarkets in the USA.
I'm not entirely clear what happened, but there was a near-collapse --
during the Enron and Worldcom scandals.
At some point I was invited to join a class action, which I did, while
thinking I'd be wasting my time. Lo and behold, today I got a check for
$431.
Now comes the tax question: These shares were held in my IRA account, but
the settlement payment was made directly to me. As far as I can tell nothing
went through my IRA custodian broker.
So how should this settlement be reported on my return for 2007?
I would assume it would be reported as an IRA withdrawal, except that the
IRA custodian seems to have no record and reported nothing.
I should add, because it was in an IRA account, I never claimed any loss on
the shares.
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Posted by Phil Marti on November 15, 2007, 3:00 pm
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> At some point I was invited to join a class action, which I did, while
> thinking I'd be wasting my time. Lo and behold, today I got a check for
> $431.
>
> Now comes the tax question: These shares were held in my IRA account, but
> the settlement payment was made directly to me.
The payment was drafted incorrectly. Return it and have it
reissued to your IRA. It then gets deposited in your IRA as
earnings.
--
Phil Marti
Clarksburg, MD
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Ron Rosenfeld on November 16, 2007, 3:37 pm
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> The payment was drafted incorrectly. Return it and have it
> reissued to your IRA. It then gets deposited in your IRA as
> earnings.
I have not seen my check yet. But I expect it will be made
out to me. In my case, the original holding was in a Roth
IRA, with a custodian who I no longer use.
So I am assuming, from what has been written here, that for
me it would be a qualified withdrawal, not subject to any
taxes or penalties.
Is that correct, in your opinion?
--ron
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Phil Marti on November 17, 2007, 2:03 am
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> I have not seen my check yet. But I expect it will be made
> out to me. In my case, the original holding was in a Roth
> IRA, with a custodian who I no longer use.
>
> So I am assuming, from what has been written here, that for
> me it would be a qualified withdrawal, not subject to any
> taxes or penalties.
>
> Is that correct, in your opinion?
Yes
--
Phil Marti
Clarksburg, MD
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Arthur Kamlet on November 15, 2007, 3:00 pm
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> A few years ago I held some shares in Royal Ahold, a Netherlands-based
> company which at that time owned Giant supermarkets in the USA.
>
> I'm not entirely clear what happened, but there was a near-collapse --
> during the Enron and Worldcom scandals.
>
> At some point I was invited to join a class action, which I did, while
> thinking I'd be wasting my time. Lo and behold, today I got a check for
> $431.
>
> Now comes the tax question: These shares were held in my IRA account, but
> the settlement payment was made directly to me. As far as I can tell nothing
> went through my IRA custodian broker.
>
> So how should this settlement be reported on my return for 2007?
>
> I would assume it would be reported as an IRA withdrawal, except that the
> IRA custodian seems to have no record and reported nothing.
>
> I should add, because it was in an IRA account, I never claimed any loss on
> the shares.
The proper way to have handled this was to file claim papers
using the IRA name.
At this point, you should try to convince he IRA custodian
to accept the check as a settlement of claim. He will
either say no way, or will accept it and then should
code it as a dividend not as a new contribution.
You could also cash it for your personal use but that
would make it an IRA distributon subject to a 10% early
distribution penalty if appropriate.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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