Sbrock Posted March 18, 2009 Report Share Posted March 18, 2009 I have a client who received a partial distribution from the Enron Net Settlement fund/class action. I havent been able to find any information to determine whether or not this settlement income is to be reported. Does anyone know?? Thanks, Susan Quote Link to comment Share on other sites More sharing options...
RoyDaleOne Posted March 18, 2009 Report Share Posted March 18, 2009 Yes Line 21, net of attorney fees if there was a fund setup, assuming the action was not for personal injury. Wow, my bad read I saw Exxon not Enron. lol Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 19, 2009 Report Share Posted March 19, 2009 Actually, it depends on how you treated the investment when Enron went down. If he has written off his full investment as a loss, then all the recovery is taxable now. But if he did not take the loss, because he expected some recovery, then this would be reported as a sale on Sch D, against his basis in the stock. Quote Link to comment Share on other sites More sharing options...
JRS Posted March 19, 2009 Report Share Posted March 19, 2009 I have two clients with settlement checks and below is how I handled it. On Schedule D, as a LT capital gain. Use the following entries: Acquisition date - original stock purchase date Sale date - date on settlement check Sale amount - amount on settlement check Cost basis - zero Gain or (Loss) - gain, equal to amount of settlement check Since I did this, I have found other forums that agreed with me, BUT it doesn't make it right. The main forum I found it on is: http://www.fairmark.com/forum/index.php You should be able to "search" ENRON settlement and get more information. Quote Link to comment Share on other sites More sharing options...
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