topic Re: class action securities settlement distribution in Get your taxes done using TurboTax

class action securities settlement distribution

IHCH7374 — Sat, 18 Jan 2025 21:08:22 GMT

This year I received a distribution from a securities settlement pointing to stock loss I took in 2018. The settlement distributor does not issue tax docs. I’m unsure how to enter this into TurboTax and found 3 options and I’m hoping someone can point me to the correct treatment and how to enter it into TurboTax.

First option, treat as Long Term Capital Gain (enter sales amount and purchase at zero?).

Second option, the distribution offsets against drawing down the capital losses carryover for the full amount so no net taxes due (does max $3000 apply? – how to enter this?).

Third option is book it as ordinary income (book it as Other Income?).

Which is the appropriate option that I should use? It’s confusing and any guidance is appreciated!

Re: class action securities settlement distribution

RobertB4444 — Mon, 20 Jan 2025 20:42:23 GMT

Since this settlement is replacing a loss that you already took on your taxes in 2018 then the income should be the same as the deduction that you took. So a capital loss in 2018 should be a capital gain in 2024. Sale date of the date that you received the settlement, sale price of the amount received, basis of zero.

@ivohofstad1

Re: class action securities settlement distribution

IHCH7374 — Mon, 27 Jan 2025 00:08:00 GMT

Thank you very much!

Re: class action securities settlement distribution

IHCH7374 — Sat, 22 Mar 2025 21:09:34 GMT

Thanks for the clear response, one quick follow up: When I enter the sale with the amount of the settlement on the day I received the settlement, which "buy" day would I use as I purchased on several days seven years ago. Which one day is appropriate to enter?

Re: class action securities settlement distribution

potentilla — Sat, 29 Mar 2025 19:21:20 GMT

desktop turbotax doesn't allow me to just enter a distribution under capital gains. It wants a 1099-B which i don't have

Re: class action securities settlement distribution

potentilla — Sat, 29 Mar 2025 19:25:43 GMT

i find i can under miscellaneous income, then other reportable income, then taxable court settlements