Solved

Is a fair fund distribution between invest co and US Securities and Exchange taxable?

Forum|Forum|3 years ago
January 9, 2023
4 replies
0 views

Regarding IRA accounts

TurboTax Online

Best answer by dmertz

If this was in regard to an investment held in an IRA, I would expect the funds could be deposited into the IRA as a restorative payment to continue to defer taxes on these funds. Otherwise I would expect that the payment should be treated as an IRA distribution.

A

Anonymous_

Employee

@dmertz may be able to help. Check back.

T

TomK2023

Yes. You can treat it as Miscellaneous Income. If you received an interest component when you negotiated your payment, then that will also be subject to tax (you should receive a 1099-INT form).

Enter this Miscellaneous Income:

Click on Federal tab.
Click on Income & expenses.
Scroll down to Less Common Income.
Click on Start or Update button Miscellaneous Income, 1099-A, 1099-C
On the next screen (Let's Work on Any Miscellaneous Income), click the Start or Update button for Other reportable income.
Did you receive any other taxable income. Click Yes.
Other Taxable Income, enter a description and the amount. Click Continue.
Click Done.

The income will be reported on Schedule 1 line 8 (z) with the description that you entered.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

D

dmertzAnswer

Employee

If this was in regard to an investment held in an IRA, I would expect the funds could be deposited into the IRA as a restorative payment to continue to defer taxes on these funds. Otherwise I would expect that the payment should be treated as an IRA distribution.