This check came from a Corporation and I am a shareholder. I was not aware of the suit, or that I had been a party to it. I don't understand how it can be treated as a dividend when no product or services were sold that earned this money.
2007-02-09 18:32:22 · 1 answers · asked by Melinda S 1 in Business & Finance ➔ Taxes ➔ United States
I would wager that there was a class-action lawsuit regarding the company's stock -- hence the 1099-DIV. If you didn't opt-out of the class, you automatically were part of it and would receive any benefit from the suit.
Frequently notification of this type of suit is made in the corporation's annual report or in some other shareholder organ that many companies distribute or possibly by direct mail or as an enclosure with one of your brokerage statements. If you dig through your records you should find reference to it. That served as your notification of the suit and your membership in the class.
And yes, it's taxable as ordinary income.
2007-02-09 19:02:14 · answer #1 · answered by Bostonian In MO 7 · 2⤊ 0⤋