Mutual Fund class action settlement

[The Rodent]

I own a mutual fund (name is irrelevant) in an IRA. There was a class action settlement against the mutual fund. My questions are:
1. If i take the settlement as a check, is that considered a taxable distribution from an IRA?
2. If I have the settlement check sent directly to my IRA, is that considered a contribution, transfer, or rollover?
3. None of the above. the settlement check is outside the scope of the IRA.

The settlement is likely to be very small and I don't a small amount of money to create a big hassle for me.
Your thoughts are appreciated.

 

[fmdog44]

I have received three checks from three lawsuits on three funds and I don't recall all the amounts but I don't think any of them were for more than few dollars. All shareholders share in the money awarded. I never gave a thought to claiming such tiny amounts.

 

[OneEyedDiva]

1. Class action suit money does not come from your IRA, so it should not be considered a distribution. They are not taking from your account to pay you for a suit against them.
2. This article probably gives an adequate answer to your second question and 3rd question.
https://www.morningstar.com/articles/907140/restoring-lawsuit-winnings-to-an-ira
Also in order for you to claim this as a tax event, you would have to get a tax form with the amount that was paid. From the time we did marketing research studies for a large, global corporation, we were told that income was only reportable if it was $600 and over. So if we didn't make that amount, they didn't send us tax forms, nor did they report our incomes to the IRS. I don't know if the same thing holds true today.