I just downloaded my 1099s from LendingClub and FolioFN. LendingClub issued me a 1099-OID with what looks like the interest paid to me on each note I held in 2012. FolioFN issued a 1099-B which shows the sale price and principle remaining for each note I sold in 2012 (some short term with a net loss, some long term with a net gain, small net loss overall). To keep things simple, I only entered the totals from each form into my tax software. This isn't a problem for the 1099-OID because I don't have to file Schedule B, but the information from the 1099-B is entered in Form 8949. It seems ridiculous to have to enter the details of each and every note sold (and I sold quite a few), especially when some only have a gain or loss of a few cents, but I think I may have to. Any thoughts?
Lending Club has not traditionally included loans that earned less than $10 interest on your 1099. Unfortunately that changed for tax year 2012. Not a happy camper here and am probably going to draw it down.
They'll gladly give you a 1099 for the interest earned, but will not include losses or fees. You have to go dig for that yourself on your statement and account for it elsewhere.
posted: Feb. 5, 2013 @ 8:02a
One way to address the long list of FolioFN transactions might be to list each long-term note sold individually and to aggregate the short-term notes with a description like "Short-Term Notes Sold via FolioFN (Full Breakdown Available Upon Request)." The thought is that the government isn't going to bother you over taking a shortcut to list short-term notes because they are taxed at the maximum rate (so what are they going to gain by auditing you?) -- but for long-term notes where the capital gains rate is lower, you have to demonstrate that you in fact held the note for the required period. I used a description similar to that for my taxes last year and haven't heard anything from the government. That said, I am not a CPA or tax advisor.
posted: Feb. 5, 2013 @ 8:06a
I did the totals of the 1099-OID and each individual note of the 1099-B. It was quite tedious. Hopefully TurboTax will get some import capability for the foliofn statement next year.
posted: Feb. 5, 2013 @ 8:28a
MADWAD said: They'll gladly give you a 1099 for the interest earned, but will not include losses or fees. You have to go dig for that yourself on your statement and account for it elsewhere.
That's an excellent point. I know a couple of notes I held were charged off, I suppose I should find them and write them off. You have to itemize to deduct investment expenses, though, so that doesn't matter to me (first time since I bought my house that I'm taking the standard deduction).
Senior Member - 1K
posted: Feb. 5, 2013 @ 10:42a
List each one individually, regardless of how many you have.
posted: Feb. 16, 2013 @ 2:20p
depalma13 said: List each one individually, regardless of how many you have.
Do you use the "Principal balance at sale date" as the cost basis? I think that's the easiest way to do it; I'm not sure if its the correct way to do it but one could argue that it is the fair market value of the notes.
posted: Feb. 16, 2013 @ 3:08p
You don't need to personally list each transaction but you should include the detail. What we usually do is total up all of the short-term transactions on one line and all of the long-term transactions on another, and for the name we say "See Statement D-1". We then attach a copy of the brokerage statement to the tax return and let the IRS go over it line by line if they want.
LendingClub e-mail said: Corrected 2012 IRS Forms 1099-OID and 1099-INT, in addition to providing a new IRS Form 1099-B for recoveries of principal amounts from previously charged-off loans, are now available within your Lending Club account "Statements" section (final documents were posted on February 19, 2013). Please use these corrected Form 1099s for your tax filing purposes. For more information please see our Tax Frequently Asked Questions or contact us at firstname.lastname@example.org. Lending Club does not provide tax advice and recommends that you consult with your financial or tax advisor if you have specific tax-related questions. Best, The Lending Club Team
I checked and I did indeed have a 1099-B which listed two notes and sales price for each of $0.01 (see attached). I looked up the notes in my LC account and they didn't show the recovery but I found one of the notes in my account history and did indeed see a recovery in that amount.
The 1099-OID did state "CORRECTED STATEMENT" on the top and the total at the bottom was $0.02 less than the previous statement, though it wasn't obvious where the difference came from (there were no one or two cent transactions) and I didn't feel like looking into it
posted: Feb. 22, 2013 @ 9:20p
Has anyone found a way deduct charged off notes using Turbo Tax Web? How about lending club fees? If so, can you explain how you did it?
Titles are but nicknames...
posted: Feb. 23, 2013 @ 3:45a
stilltrackin123 said: Has anyone found a way deduct charged off notes using Turbo Tax Web? How about lending club fees? If so, can you explain how you did it?LC sent me a 2012 1099-B for $.02 for a note charged off in 2011.
I assume fees just add to the basis of the note?
Senior Member - 2K
posted: Mar. 17, 2013 @ 4:52p
ThomasPaine said: stilltrackin123 said: Has anyone found a way deduct charged off notes using Turbo Tax Web? How about lending club fees? If so, can you explain how you did it?LC sent me a 2012 1099-B for $.02 for a note charged off in 2011.
I assume fees just add to the basis of the note?
Those are only for the amount recovered on charged-off loans. They don't send you a statement for charged-off loans, you need to look through your year-end statement to determine that.
posted: Mar. 24, 2013 @ 5:43p
Here is the newest (and most excellent) post on a how-to for P2P loans and taxes:
1099-B form is reported to the IRS in the case of earning money through sales or exchanges. This form will show cost basis information. To file this information with appropriate way we can use 1099 electronic filing software. 1099-B reduces the burden on individual taxpayers to maintain records on their investments and simplify the tax reporting process.
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