Class action check put back in IRA?
We have a client who received a class action check regarding a security in his IRA. It had been sold years ago but recently received a class action check to help minimize the loss from the sale. Can this check be directly deposited into his IRA without any tax ramifications ?
Permalink Submitted by Alan - IRA critic on Mon, 2021-09-13 20:06
The check (known as a “restorative payment”) should be payable to his IRA, not to him personally. Such a check would be treated as a non reportable transfer to his IRA after being endorsed for deposit by client, so there would be no tax filing implications. If client no longer has the IRA account that previously held this security, client should be able to use the same procedure to deposit into a current IRA of choice. Of course, client should first check with his IRA custodian to determine any variances from the above.