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February 2, 2023
Question

Settlement from a Class Action suit

  • February 2, 2023
  • 1 reply
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I received a settlement from a class action suit because I was paid too little when the company called its preferred stock.  Major stockholders received about $3 per share than others.  My settlement was principal amounts and pre-judgement interest.  I received a 199-INT for the interest but won't be receiving a 1099 for the principal.  Since it is an underpayment of stock that was called, do I input the amount as a capital gain or just as misc. income?

    1 reply

    February 2, 2023

    Since the settlement specifically awarded interest, you will have to add as interest income.  You would be able to put the additional income as capital gain.