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Posted by Benjamin Yazersky CPA on March 10, 2007, 2:30 am
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>>> Five years ago I sold some shares of stock at a loss and
>>> summed that loss into my 1040 Schedule D capital gains for
>>> that year.
>>>
>>> In 2006 I received a settlement check for about $800
>>> resulting from a class action suit against the company whose
>>> shares I'd held.
>>>
>>> Is it proper for me to show that settlement payment amount
>>> as a long term capital gain for 2006? If not, how should it
>>> be declared?
>> long term capital gain is correct
> Even if it was a short-term capital loss when sold?
its a recovery of an item previously deducted on a prior
year's tax return so the recovery takes on the same status
if it was a short term capital gain or loss, then the
recovery is a short term capital gain
if it was a long term capital gain or loss, then the
recovery is a long term capital gain
___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] >>>
-----> real address on hobokeni or hobokenx <-----
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