I recently received a settlement from a class action lawsuit against Nortel. The class action lawsuit was a result of Notel cooking their books back in 2001. Folks who purchased stock in Nortel during that timeframe lost alot of $ as a result of their fraud as the stock value plummeted when the truth came out.
The settlement was awarded finally as a combination of both Nortel common stock and a check. Upon receiving the stock, I immediately sold it and reinvested it in index funds.
My question is: Do I have to claim and pay any federal or state taxes on any portion of the settlement as part of my 2008 tax return given the significant amount of $ lost due to Nortels' deceit and fraud?
The settlement was awarded finally as a combination of both Nortel common stock and a check. Upon receiving the stock, I immediately sold it and reinvested it in index funds.
My question is: Do I have to claim and pay any federal or state taxes on any portion of the settlement as part of my 2008 tax return given the significant amount of $ lost due to Nortels' deceit and fraud?