The friendly lawyers in a classaction lawsuit tell me I'm entitled to some cashola (over $1k) because an Internet dot-bomb company settled the class action. Woohoo! But the rub is...I purchased and sold the shares in my contributory IRA. So when I get my check from those greedy theivin' dot-commers - am I free to take spend it as I see fit? Or do I have to put it in my IRA and lock it away until old and grey?
2006-08-18 15:58:01 · 3 answers · asked by HomeSweetSiliconValley 4 in Business & Finance ➔ Taxes ➔ United States
This happened to me, and I was advised to deposit the check into the IRA account. It was treated specially, not as a contribution or a rollover. I believe that depositing the money into another account would be treated as a withdrawal of the IRA, making it taxable and subject to a 10% additional tax if you are under 59 1/2.
2006-08-19 02:17:46 · answer #1 · answered by NotEasilyFooled 5 · 1⤊ 0⤋
The money belongs to the IRA and should go there. If you spend it you will owe tax and penalties. Trust me, you'll appreciate the money even more when you are old and grey!
2006-08-19 08:25:07 · answer #2 · answered by TaxGuru 4 · 0⤊ 0⤋
It would be separate from your IRA.
Enjoy.
2006-08-18 17:02:35 · answer #3 · answered by Judy 7 · 0⤊ 1⤋