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Topics - mrwhizzard

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1
Investing - General (not P2P) / Net Investment Income Tax
« on: February 14, 2019, 04:21:02 PM »
I'm not sure if this is really the right forum to ask this question, but I figured some of you might also have to fill out Form 8960 (Net Investment Income Tax). My questions are regarding line 9B. The form instructions say that this line should "Include state, local, and foreign income taxes you paid for the tax year that are attributable to net investment income" and that you can use "any reasonable method" to determine that amount.

(1) It seems that most of the tax prep software uses something like "(schedule A line 5A) * (net investment income) / (adjusted gross income)". This doesn't seem reasonable to me because Schedule A line 5A is taxes paid during the tax year, rather than taxes paid for the tax year. For example, 5A could include a large end-of-year payment for 2017 that I paid when filing my taxes in 2018. Or, it could include a very large overpayment of 2018 taxes that will be mostly refunded in 2019.

(2) It is unclear to me from the instructions whether the $10k limit on state and local taxes which applies to itemized deductions also affects from 8960. The 8960 instructions say that line 9B can include "State, local, and foreign income taxes if properly deducted on your return when calculating your U.S. regular income tax" (emphasis mine). This would, in my opinion, tend to limit you to the $10k, since nothing over that amount is deducted on your return.

Any opinions that might shed some light here?

Here's a link to the instructions:
https://www.irs.gov/pub/irs-pdf/i8960.pdf

2
Investors - LC / tax question: "worthless security"?
« on: February 09, 2018, 10:58:34 AM »
I'm using TaxAct this year, and after importing all of my LC and Prosper 1099-B transactions, TaxAct is flagging a warning regarding each of the transactions with a $0 "proceeds" (which is the case for all the charge-off's that have had no recoveries so far):

Quote
You have not entered a sales proceeds amount for LendingClub Note 123396681. Please verify that this is correct. If there are no sales proceeds then one of the first two check boxes below should be checked. If your sales proceeds when entered round to $0, you can ignore this alert.

The two check boxes referred to are:

Quote
  • Check here if this property is an option you purchased that has expired.
  • Check here if this property is a security that became worthless during the tax year. The IRS considers worthless securities as if they were sold on the last day of the tax year, therefore if this is a worthless security you will need to enter 12/31/2017 above for the date sold.

Now, arguably the second check box could apply here. But it seems like a bad idea to change the reported sale date, since not only will it no longer match the 1099-B, but it will in some cases change the transaction term from short to long. My instinct is to ignore this warning, and use the data from the 1099-B as reported, but I wanted to check if anyone else has a differing opinion here.

3
Investors - LC / Collection log starts before note issued?
« on: January 24, 2018, 03:18:03 PM »
This is a new one for me. I have an In Grace Period note that has a collection log entry from a week before the note was issued. I'm assuming it must be a typo on the date, but really? This seems like something even the most basic QA would catch...



4
Investors - LC / LC Email: "The Next Generation Credit Model"
« on: September 11, 2017, 02:19:15 PM »
I just got the below email about an updated credit model. The one comment here that concerns me slightly is the shift to grades A and B loans. I'm a little wary of a credit model enhancement that makes moves more people up than down...

Quote
We have launched the most advanced and predictive credit model ever used on the LendingClub platform. It's the latest in LendingClub's long history of innovation on behalf of borrowers and investors.
 
The new model leverages machine learning and 10 years of LendingClub data to better assess and price credit risk. LendingClub has helped 1.5+ million borrowers since 2007; each borrower provides unique insight that we can use in our next decision.
 
What investors need to know about the new credit model:
 
•   It's 24% better at differentiating the likelihood of a borrower charging off than the fourth-generation model, and is more predictive than a borrower's FICO score alone.
 
•   It's built on a wealth of proprietary data, incorporates more data points for each borrower, uses best-in-class modeling techniques, and uses dozens of new custom attributes that are predictive in assessing risk.
 
•   We expect loan volume to shift toward higher quality grades (grades A and B) because some borrowers will qualify for lower interest rates under the new model, and other higher-risk borrowers, who may have received an offer previously, will be screened out.
 
•   We continue to see lower delinquency rates across grades and terms in the existing loan portfolio than in the second and third quarters of 2016.
 
We see this credit model as the latest innovation in our continuous enhancement cycle, and one that helps us continue to provide investors with solid risk-adjusted returns. See here for more on what makes the model unique.
 
As always, please reach out to us with any questions or concerns at (888) 596-3159. Monday-Friday from 7 a.m. through 5 p.m. PT, or investing@lendingclub.com.
 
Best regards,
The LendingClub Team

5
Investors - P / sold notes
« on: April 12, 2017, 02:34:03 PM »
For some reason, I have trouble interpreting the note details for notes which have been sold after charge-off. Here's a recent one in my account:



Which number is the amount of the recovery? I think it must be the $5.74? It seems confusing that under the "borrower payments", it shows a "recovery" payment of the full amount ($26.35).

6
Investors - LC / NAR doesn't make sense
« on: March 02, 2017, 05:18:05 PM »
So, I thought I at least had a rough understanding of how LC was computing NAR. However, today I see that even though my "Adjusted Account Value" is slightly below the value of the single ($5000) deposit I made about 18 months ago, the Adjusted NAR is (slightly) greater than 0:



What explains this? Is it taking into account some pending payment that hasn't shown up in the cash balance yet?

7
Investors - P / prosper 1099-B tax questions
« on: February 02, 2017, 10:43:22 AM »
So I got my first Prosper 1099-B (last year, I hadn't been investing long enough to have any charge-offs). Unlike Lending Club, where each loan is listed once, it appears that Prosper lists a loan twice in some cases: once for the charge-off, and once for the recovery. Is the right way to report this to enter two lines on form 8949 in these cases? Or should it be combined to show the charge-off cost basis and the recovery proceeds on the same line? I see that they list different dates sold for each of the two transactions, so potentially this could get messy if it straddled a short-term/long-term boundary.

8
Investors - LC / pre-emptive collections log?
« on: January 09, 2017, 01:24:13 PM »
From time to time, I have seen listed in the collections log for a note that a buyer has called and "promised to pay" prior to the payment due date. For example, loan 55309949...

Payment History:
Quote
Due Date // Settlement Date // Payment Status
12/28/16 // --- // Pending
11/28/16 // 12/1/16 // Completed
10/28/16 // 11/2/16 // Completed
...

Collection Log:
Quote
12/19/16 (Monday)    Borrower contacted Payment Solutions specialist and promised to pay

What does this mean? Is the borrower calling in to say their payment will be late, but is coming?

9
Investors - P / PMI7 Credit Model
« on: December 12, 2016, 09:54:09 PM »
I just received this email from Prosper:

Quote
Prosper is planning to launch its 7th generation credit model (PMI7) around December 20, 2016.  As part of this process, Prosper is changing its credit bureau from Experian to Transunion (“TU”).

There are further details, but I didn't quite understand this particular point:

Quote
Binary declines in the Credit Guidelines have been modified to accommodate the Transunion data, but they have not been loosened.

Any idea what they mean here?

10
Investors - LC / FICO updates for charged off loans?
« on: November 07, 2016, 05:20:53 PM »
I was just browsing through some charged off loans, and happened to notice that I am still getting FICO updates for loans ever after they have charged off.

I guess I wouldn't have expected any updates post charge-off. Is this normal?

11
Investors - P / payment reversed 2+ months later?
« on: May 23, 2016, 02:36:36 PM »
I just saw this on one of my Prosper notes. How can a loan payment be reversed 2 and a half months after the fact?

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