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Here are answers from members of the Maryland Association of Certified Public Accountants to readers' tax questions. The Sun will publish answers through April 15.

Q: I lost $3,000 in Jiffy Lube stock in 1991-92. Because it was in my IRA, I did not claim a loss on my taxes. Because of a stock litigation award, I received a $175 settlement in 1993. Is this money taxable?

A: If the $175 is deposited into an IRA, it will not be taxed. If it isn't deposited into an IRA, it will be taxable as an early retirement plan distribution. In this case, the $175 is taxable as ordinary income and will be subject to a 10 percent penalty tax unless you were at least 59 1/2 years old or entitled to one of three infrequently encountered exceptions. IRS Publication 590 (pages 34-35) discusses these exceptions.

Q: I received a lump-sum distribution from cashing a whole life policy at age 62. The company advises that I owe tax of $2,100. How should it be shown -- as interest, dividend or a capital gain?

A: A portion of a lump-sum distribution from a whole life policy is taxed differently depending on the type of policy you have. If it is a variable policy, then it will be a capital gain.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary. Consult with a tax adviser for specific advice.

Readers may submit questions by phone, mail or fax. Selected questions will be answered in The Sun and The Evening Sun.

To ask a tax question by phone, call Sundial, The Sun's telephone information service, at (410) 783-1800. In Anne Arundel County call 268-7736, in Harford County 836-5028, and in Carroll County 848-0338. Using a touch-tone phone, enter 6120 after you hear the greeting.

Written queries may be sent to TAX QUESTIONS, The Baltimore Sun, Business News Department, 501 N. Calvert St., Baltimore 21278. Fax questions to The Sun's Business News Department at (410) 783-2517. Callers are encouraged, but not required, to leave their names and phone numbers should questions need to be clarified. Names will not be published. Questions will not be answered by phone.

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