I received a $75k settlement from a mediation with my former financial advisor's firm.Do I pay tax on it when I pay my taxes next year or do I pay estimated taxes now?
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bhtb
New Member

I received a $75k settlement from a mediation with my former financial advisor's firm.Do I pay tax on it when I pay my taxes next year or do I pay estimated taxes now?

I receive a teacher's pension and social security and the state withholds.  I have always received a refund from the withheld taxes. 

3 Replies
Anonymous
Not applicable

I received a $75k settlement from a mediation with my former financial advisor's firm.Do I pay tax on it when I pay my taxes next year or do I pay estimated taxes now?

let's say the mediation award was because the FA put you into bad investments on which loss money or inappropriate investments on which you lost money . the award is to compensate you for the loss. assuming you deducted the losses, which you should, then the award is taxable.  



if your situation is different please explain. 

bhtb
New Member

I received a $75k settlement from a mediation with my former financial advisor's firm.Do I pay tax on it when I pay my taxes next year or do I pay estimated taxes now?

It was to compensate me for churning abuses, use of margins, and cashing out an annuity with a 7% guaranteed annual return when I had asked him to borrow money against my holdings.  The majority of the settlement was attributable to the loss of $100k in death benefits which I forfeited because of the total distribution.  He told me we had reinstated the annuity but, in fact, only $10k of the money redeposited was eligible for the 7% annual guarantee.  I essentially lost the ability to leave my daughter a $600k inheritance which is what the death benefit would have paid out in another 7 years.  Does this answer your question?  Losses from the sale of stocks were claimed on past taxes (and will be for years to come).  I think this is seen differently.
bhtb
New Member

I received a $75k settlement from a mediation with my former financial advisor's firm.Do I pay tax on it when I pay my taxes next year or do I pay estimated taxes now?

I know the award will be taxed.  My primary concern is whether I pay now under estimated taxes or later when I normally pay my taxes (February or March of 2020).
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