I got my settlement! Yippie!!!

[Turbineguy]

Loose living and self-indulgence, here I come!

Hardly. 41 dollars and change. From the Scudder Fund market timing affair of 2006.

I think we can rest assured of the following:

"No Investment Bankers or Wall Street Touts were harmed in the reaching of this settlement."

But it's another sign the Bush Administration is over.

[panader0]

1. A case of beer and a few steaks!

[Double T]

2. The lawyers got rich and tossed you and other investors some crumbs.

[Turbineguy]

6. Actually

It was the New York Attorney General. One of Elliot Spitzers cases, started before Wall Streeters extracted their grim revenge.

[ParkieDem]

7. Did Spitzer hire outside attorneys for this, though?

I'm not sure in this case, but that's becoming more common these days.

[dixiegrrrrl]

3. Is it taxable?

:evilgrin:

[Turbineguy]

4. Deferred. It's IRA money.

[customerserviceguy]

5. Only if it stays in, or is rolled over into the IRA

Otherwise, not only would it be 100% taxable in your bracket, you'd have to pay a 10% early withdrawl penalty.

The lawyers who "represented" you, on the other hand have significant tax consequences from the millions they raked in.

[Xenotime]

8. You will need to pay your taxes on it.

[A HERETIC I AM]

9. How do you figure?

Turbineguy said "It's IRA money" which one would assume means the settlement he is going to get is a result of a fund he held inside an IRA.

He'll only have to pay taxes on any of it when he pulls cash out of his IRA during his retirement years.

The poster above you seems to be a bit confused as well.

customerserviceguy said;

Only if it stays in, or is rolled over into the IRA

Why wouldn't it stay in? The settlement would be payable to the account in which the fund was held. Turbineguy said it is an IRA account. There is no way it needs to be "rolled into the IRA" as it will settle to that account anyway.

Otherwise, not only would it be 100% taxable in your bracket, you'd have to pay a 10% early withdrawl penalty.

As I said above, the money received from this or any similar settlement, on a fund or security initially held in a tax-deferred account is taxed as ordinary income when it is taken as a distribution after the age of 59 1/2. If the OP has no intention of taking a distribution before that age then no penalty is assessed nor are any taxes currently due.