Mr Cooper Group Inc (COOP)

[Boris the Spider]

Taxes on escrow gains.

My understanding is that since there is zero basis and this is considered a "settlement" like an insurance type settlement, that it may not be taxable at all when paid out. I have heard this from several. Of course if you ask the IRS they will say it is taxable as a cap gain, but in reality it is really a settlement and as such likely not taxable at all.

Check with your own advisor, but if they do your taxes for you they will advise cap gains because their name is on the tax doc and they don't want to take a chance.

The good news is, even if you claim it as cap gains, the first $450K is at 15% depending on your income, and anything over that is at 20%. Still much better than ordinary income.

Do what you wish or what your advisor tells you is best, but I will not be paying tax on those funds and am willing to challenge it because it is rightfully a settlement.