Comments on: How I Report My Lending Club Charged-Off Loans

By: writing2reality

writing2reality — Tue, 15 Apr 2014 20:24:19 +0000

I would hold on to it and provide it down the road if they desire to see it. That isn’t something I would be too worried about sending in at this point.

By: Jack Doge

Jack Doge — Sat, 12 Apr 2014 20:40:01 +0000

Should I automatically snail mail it in after my file submissions has been received or should I hold off until they contact me down the road? I wonder if it’s better to hold onto this attached info or send it in no matter what?

By: writing2reality

writing2reality — Sat, 12 Apr 2014 12:42:06 +0000

Jack, my recommendation would be to summarize the information in both long and short term amounts. Should the IRS need the support, you have that in the form of your Lending Club tax forms. This saves time, and still allows you the ability to report you losses in the appropriate category. I hope this helps!

And the usual disclosure, I am not a tax advisor and these are only my opinions. Consult with a professional on all tax matters.

By: Jack Doge

Jack Doge — Fri, 11 Apr 2014 03:37:23 +0000

I am using Turbo Tax and I am still a little bit confused about reporting my Charge Offs in Turbo Tax. I have inserted all the 1099-B proceeds guided by TT, (which was LONG AND TEDIOUS for me). Then, I move to the last part, the Charge-Offs, and it’s a LONG LIST. 1.) Where do I put that in TT? 2.) Because it’s rather long, can’t I just summarize it?

By: writing2reality

writing2reality — Sat, 05 Apr 2014 16:17:42 +0000

Certainly adding the loan number doesn’t hurt, but for me, if the IRS were to ever audit me and question my treatment, I’d just send them a copy of the summary statement and let them do the work of double checking. As long as everything in total ties, I’m comfortable with it.

Thanks for sharing your experience as well.

By: A Frugal Family's Journey

A Frugal Family's Journey — Sat, 05 Apr 2014 14:27:52 +0000

Great info…looks we reported our charge offs the same. The one difference is my description was slightly different. I also included the loan number.

By: writing2reality

writing2reality — Thu, 20 Mar 2014 14:37:33 +0000

Reporting the interest income is very simple. Charge-offs aren’t too far behind when it comes to simplicity. Of course given that you are selling notes, you add some gains/losses to the mix, but otherwise the biggest challenge is that the income and losses do not match during tax reporting. Ordinary income versus capital losses. Hopefully as P2P lending grows, further guidance and tax treatment considerations should come out.

Thanks for stopping by CI and best of luck with your investments! I will definitely consider a post about selling late notes.

By: Important advise: How I Report My Lending Club ...

Important advise: How I Report My Lending Club ... — Thu, 20 Mar 2014 00:33:28 +0000

[…] One of the most confusing parts of peer to peer lending since its inception is the tax reporting of income and losses, especially the charged-off loans we all experience (How to Report your Lending Club Charged-Off Loans #p2p #p2plending #lendingclub… […]

By: How I Report My Lending Club Charged-Off Loans ...

How I Report My Lending Club Charged-Off Loans ... — Thu, 20 Mar 2014 00:16:26 +0000

By: CI

CI — Wed, 19 Mar 2014 23:52:29 +0000

I used turbo tax to file my taxes this year and discovered LC is very simple. I thought there would be more to it… The only annoying part is that the income is fully taxable! Anyways I haven’t had to deal with charge offs yet, if a note doesn’t pay I simply sell it on the secondary market. I had to sell one a few days ago in fact.

Not sure if selling delinquent notes is the best strategy or not. Might be a good topic for a post if you have any ideas on the matter.