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Biotech / Medical : Gliatech (GLIA)
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To: barkdog who wrote (1996)1/31/2005 5:05:13 PM
From: RCMac  Read Replies (2) of 2001
 
a question for any accountants out there: is my GLIA settlement a "capital gain" or line 21 other individual income?

I can't cite any authority for it at the moment, but I believe the settlement proceeds take the character of what they replace, proceeds on sale.

So if you sold your GLIA for $3.00 share and later (in another tax year) got another $0.20/share, the 20 cents would be a long term capital gain if the (presumable) loss on the sale at $3.00 was long term.

If the shares for which you received the settlement were in your IRA, 401(k) etc., you should probably have deposited the check in the same tax-favored retirement vehicle, with no current tax consequences. If you didn't, technically the settlement proceeds might be the equivalent of a withdrawal from the IRA etc., subject to ordinary income tax, and (if you were under 59 1/2 when you got the settlement check) possibly also a 10% early withdrawal penalty.

Hope this helps??

Aren't you glad you asked?
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