Hi and welcome to Just Answer!If the settlement is paid to you directly - that is most likely according to the settlement - and not to your IRA account - that is your taxable income - and should be reported on form 1040 line 21. I assume that amount is reported to you on form 1099MISC - and not on 1099R.You may not avoid taxable income and may not transfer funds into your IRA account.
Thanks for your quick response.
Yes, the check is made out to me and not to my IRA account. I have not yet received a 1099 for the money. Where should I enter it if I do get a 1099R? I am over 59 1/2 years old if that matters.
Generally - if the settlement amount is NOT paid out of your retirement account - there is no 1099R form.But you might receive a form 1099MISC reporting that distribution. If the payment is received in 2013 - you will likely get a reporting form in January of 2014.Regardless if that income is reported or not - that is your taxable income - and should be reported on form 1040 line 21 - Other income.