Restorative payment in crypto – overcontribution?
This is a weird question….
Say I receive a restorative payment for self directed retirement account in crypto. If lawyers send me a small test transfer say $10ish and then send me the full amount of the settlement as another transfer, would the $10 for the test transfer be considered an overcontribution? Or if test transfer amount + settlement amount < amount lost am I okay?
Guessing if it is an overcontribution I need to remove the $10ish + any proportionate capital gains?
Permalink Submitted by Alan - IRA critic on Sun, 2023-12-24 19:31
The legal firm should clarify if the test amount is part of the settlement. If not, then you should remove it as an excess amount with allocated ordinary earnings (not cap gain).
Permalink Submitted by Jennifer Hansen on Mon, 2023-12-25 07:43
Thank you!