Question

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?

Forum|Forum|6 years ago
June 7, 2019
1 reply
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I receive a teacher's pension and social security and the state withholds. I have always received a refund from the withheld taxes.

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A

Anonymous

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.

B

bhtbAuthor

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.