Long Time Mutual Fund Investors Keep an Eye on Your Mailbox – A Surprise May Be Coming

Investors who have been involved in the Capital Markets for an extended period of time and who have owned Mutual Funds may want to keep an eye out for settlement checks from long ago investments.

Settlement Present

In the late 1990’s and early 2000’s multiple Mutual Funds companies were found to have participated in after market trading. The end result were multiple settlements, which to this day are being paid out to investors.

Unfortunately, advisors have little if any insights into the payment amount, timing, and delivery of these settlements.

Most amounts are relatively small, but certainly worth watching out for and receiving.

A Gift/Payback that Bites:

From a tax standpoint keep very good records of the receipt of the check(s) and make sure you toss copies into your tax file for your federal filing records for the current year.

If you received the settlement from an IRA and you do not deposit the check into an IRA the you will have been deemed to have taken a distribution for the amount. If you happen to be 591/2 years of age or younger, you will owe a penalty on the distribution.  If in doubt, call your advisor and always keep good records.

While it may seem a bit unorganized, at least investors are receiving their money back, even if in some cases from events occurring 10 years ago.

Have A Great Day !


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