It may not have been settlement from a law suit, but the amount you received from the broker is ordinary income. It does not change the cost basis of the inherited stock, which is/was the value on the date of death of whomever you inherited the stock from. The tax rules may not be conforming to the way you think they should work, but that is common with the tax code.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
