Our club bought 100 MO in 1992 and sold it in 1995. Now, as
part of the class action settlement, we have gotten a check
for $120. Would we record this under Income as 'return of
capital' ? If so, another problem is that these
transactions both precede our usage of NAIC software and
bivio, so this stock is not in our current list of
securities. If we enter the stock now as both purchase and
sale years ago (in order to get it on our list), will it
screw up our current cash balance?? Any help will be
appreciated. Thanks... jjod

Money received from a law suit will be listed as 'Other Income' for your club, and will be taxable to the members. See IRS publication 525, and look under Other Income for more information.
 
-John Sweet
 
Jim ODonnell wrote:
> Our club bought 100 MO in 1992 and sold it in 1995. Now, as
> part of the class action settlement, we have gotten a check
> for $120. Would we record this under Income as 'return of
> capital' ? If so, another problem is that these
> transactions both precede our usage of NAIC software and
> bivio, so this stock is not in our current list of
> securities. If we enter the stock now as both purchase and
> sale years ago (in order to get it on our list), will it
> screw up our current cash balance?? Any help will be
> appreciated. Thanks... jjod

John Sweet said........

<<
Money received from a law suit will be listed as 'Other Income' for your
club, and will be taxable to the members. See IRS publication 525, and
look under Other Income for more information.
>>

I'm not convinced that is universally true. I believe the reason for the
class-action award would determine the nature of the income. It could be
that the award should be treated as capital gain.

Rip West
Ridgway, CO