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Rant against the SEC, IRS, greedy fund managers ...

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Rant against the SEC, IRS, greedy fund managers ...  Reply with quote  

Friday I received a letter and a check for the princely sum of some $35.odd cents, the payment being my portion of a settlement between a mutual fund company and the SEC for alleged harm done to fund shareholders' share value due to overtrading by the fund's managers.

Fine. But get this: the administrator of the settlement got a Private Letter Ruling from the IRS exempting them from having to report to the IRS, putting the burden of compliance on the individual investor. The PLR rules that the distribution is not to be taxed as ordinary income but as a capital gain by adjusting the basis of the investment.

WTH. I sold this investment in 2003, realizing a nice capital gain. But if I cash the check, I can't just report it as income in 2007. Because it's a basis adjustment for a gain realized in 2003, I have to file an ammended tax return for 2003!!!! Is it worth my while to file a tax return for 2003 for some $29.odd net of capital gains tax? They must be kidding.

In fact, I think they're not kidding. I think it's intentional, knowing that they're spared the expense of sending out 1099s and that many investors realizing, like me, they have to file an ammended return, are just not going to take the money. So I suppose the money reverts to the settlement fund. I don't know who gets what's left over, the administrator or the mutual fund, but they get to keep it, not me. Evil or Very Mad

I'm going to send them a letter refusing payment. Razz

Post Mon Jul 09, 2007 2:39 pm
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I thought this was going to be about Jim's rant heard around the world.

2003 wow on amending that. yea LOL

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