Enron net settlement

[Sbrock]

I have a client who received a partial distribution from the Enron Net Settlement fund/class action. I havent been able to find any information to determine whether or not this settlement income is to be reported. Does anyone know?? Thanks, Susan

[RoyDaleOne]

Yes Line 21, net of attorney fees if there was a fund setup, assuming the action was not for personal injury.

Wow, my bad read I saw Exxon not Enron. lol

[kcjenkins]

Actually, it depends on how you treated the investment when Enron went down. If he has written off his full investment as a loss, then all the recovery is taxable now. But if he did not take the loss, because he expected some recovery, then this would be reported as a sale on Sch D, against his basis in the stock.

[JRS]

I have two clients with settlement checks and below is how I handled it.

On Schedule D, as a LT capital gain. Use the following entries:

Acquisition date - original stock purchase date

Sale date - date on settlement check

Sale amount - amount on settlement check

Cost basis - zero

Gain or (Loss) - gain, equal to amount of settlement check

Since I did this, I have found other forums that agreed with me, BUT it doesn't make it right. The main forum I found it on is: http://www.fairmark.com/forum/index.php

You should be able to "search" ENRON settlement and get more information.