Folio and IRAs

[core]

Stop being retards everyone!!!

lcdude, do you work for LendingClub?  I'm only asking because of the "LC" in your name.  Oh and I guess it was something about your choice of words for us investors.  I can't put a finger on it. 

You do make perfectly valid points, but none of this changes the fact that LC's own site says that notes cannot be traded.  That snippet, as you may recall, is what started this whole thread.  If what you say is true and the law agrees, then it should be a simple matter for LC to remove that snippet from the site.  They have not done so.

[DanB]

Core......... So you think there's another coverup/conspiracy going on.

Conspiracy, no.  Cover-up, yes maybe.  I'd sure call it a cover-up if after a company does something that could potentially cause big problems for others, they subsequently try to keep it quiet and/or has its account reps make up stories while they scramble to figure out a solution and damage control.  One definition of a cover-up is an attempt, whether successful or not, to conceal evidence of wrongdoing, error, incompetence or other embarrassing information.

I'd say this meets that definition.  The original event need not be intentional.  And it does not matter what their good intentions might be at a later date to fix the problem.  Do you have another word for this?  Not a Portuguese one, please.

Just out of curiosity, would this one be like the 6th or is it the 7th conspiracy or cover up that you've suspected, suggested or insinuated LC to be somehow involved in within just the last year? Because I've lost count since I was too busy keeping track of the ones you think I am party to in league with them.

If this is the 6th or 7th one then it would still have no relevance to anything but my own credibility.  And my credibility in turn has nothing to do with this incident.  All one has to do is read LC's own site, and then read the narratives of employee contact posted by others to see what is going on.  My posts have nothing to do with it.

Would somebody please get to the bottom of this before Core names this whole thing LCGate!
I'd volunteer to find out, being so close to SF & all, but that'll just make Core spin another conspiracy.

Dan, if you can come up with a plan, but all means do so, with all haste!  If you would like to volunteer I give my word that I will not accuse you of conspiring with LC on this particular matter.  I am eager to hear what your plan is though.  I hope you are not one of those people who thinks an in-person visit and a handshake means that you are somehow magically going to get a different truth (or lie) than an email or phone call would.  You are going to need to be more creative than that.  I know you have it in you.

For example, if would be rather unsatisfying if you walked in there and had a 10 minute chat with someone at LC and then came back here to post something like this:

"I have spoken with John Smith, the Chief Cover-up Guy at LendingClub.  He assures me that there are some exciting developments on this which I hope to be able to share with you in the coming weeks.  Stay tuned for details."

The details never come.  The cover-up continues until everyone loses interest or forgets the whole matter.  The IPO happens.  Their plan works out just how they wanted.

Hey wait a minute, Where have I read stuff like that before? 
BTW, just like our former President, I have the ability to look into someone's eyes & sense their soul. That & a handshake is how I do my car insurance, so I don't see the problem. 

[core]

Hey wait a minute, Where have I read stuff like that before? 

I have no clue, Dan.   I simply made it up.  I was just trying to think of the absolute most unhelpful series of sentences that one might be tempted to string together after having been on an important fact-finding mission.

BTW, just like our former President, I have the ability to look into someone's eyes & sense their soul. That & a handshake is how I do my car insurance, so I don't see the problem. 

Well then get in there and smoke 'em out Dan!  Mano y mano.  I have little confidence that you will get the real truth with such a simple plan.  When you return with your report I'll be the decider.

[DanB]

Hey wait a minute, Where have I read stuff like that before? 

I have no clue, Dan.   I simply made it up.  I was just trying to think of the absolute most unhelpful series of sentences that one might be tempted to string together after having been on an important fact-finding mission.

BTW, just like our former President, I have the ability to look into someone's eyes & sense their soul. That & a handshake is how I do my car insurance, so I don't see the problem. 

Well then get in there and smoke 'em out Dan!  Mano y mano.  I have little confidence that you will get the u]real[/u] truth with such a simple plan.  When you return with your report I'll be the decider.

Nah, it's ok. Besides, won't it be more fun for you to just entertain possible scenarios other than knowing the truth? Also I'm sure you've considered the possibility that even if I knew the truth or found out the truth..............I might just decide to "protect" you from it. 

[core]

Besides, won't it be more fun for you to just entertain possible scenarios other than knowing the truth?

Perhaps.  But if I think up any more scenarios relating to this matter I'll have to keep them to myself, because I don't think lcdude's blood pressure can take any more.  It sure sounded like his head was going to pop right off of his body! 

Anger is the 2nd stage of grief, right after denial.  First we tell ourselves that the trading is perfectly legal and that nothing bad will happen to us or our accounts.  After all, why else would LC let us do it?  It's no different than real estate, yes that's it.  Eventually we realize this denial cannot continue and we become angry.  Taking out our anger on random individuals and the mentally challenged.  Then begins the bargaining stage.  "If I just stop trading now, everything will turn out all right for me."  This is followed by a bout of depression and withdrawal... not even wanting to check on your Folio sales for the day.  And finally acceptance.  Acceptance of the fact that you are doomed.

By the way, this thread is now #3 on the all-time most active threads list.  Right behind Sarah's complainypants thread.  All I did was ask a simple question, expecting a simple answer...

[Lloigor]

Did no one here have an IRA account with them in 2012 and see if there was or was not a 1099-B issued?

[DanB]

Did no one here have an IRA account with them in 2012 and see if there was or was not a 1099-B issued?

Peter had 2 IRAs with them in 2012.

[jimsar]

Did no one here have an IRA account with them in 2012 and see if there was or was not a 1099-B issued?

Sorry, I don't understand - - - does "them" refer to Foliofn or to Lending Club? And why a 1099-B?  (I believe that's for barter income)

In my unexpert opinion, if you have IRA money in a Lending Club account under the custodianship of SDIRAServices, you're playing with fire by trading on Folio under said account.  I believe you run the risk of getting it deemed as an IRA distribution.  Folio is a separate broker-dealer, and I think they serve as their own retirement account custodian.  So, money under a separate custodian, i.e. SDIRAServices, cannot be taken out and invested/traded under another broker-dealer, unless of course you rolled it over to a SDIRAServices IRA account.  I'm not saying they (meaning LC and the two custodians) can't make some kind of arrangement in the future with the blessing of the IRS, but under current rules, I think you run the risk of committing a prohibited IRA transaction.

[core]

I have just learned that in the very near future, Lending Club will be "electronically prohibiting" trades from within an IRA.  They are working with Folio legal to resolve the issue.  It doesn't sound like they know exactly what impact this will have on people who have already traded in their IRAs.

And why a 1099-B?  (I believe that's for barter income)

1099-B is issued whenever you sell anything with your broker... stocks, bonds, funds, and Folio notes.

[Rob L]

I have learned a bit about the terminology of "IRA" speak.  An IRA rollover is the movement of funds between 2 types of retirement plans that may be different, such as from a 401(k) plan to an IRA. Rollovers may be subject to federal income tax unless all requirements are met. For example:

    You must complete the rollover within 60 days of receiving the funds (all IRAs)
    You may only roll over funds from the same IRA once every 12 months (Traditional and SEP IRAs)

An IRA transfer is the movement of funds between the same types of accounts, such as from one Traditional IRA to another Traditional IRA, where there is no distribution to you. The money is transferred directly from one financial institution to another on your behalf and is also known as a trustee-to-trustee or custodial transfer. Transfers can take place as often as you like, and they are not taxable.

It is clear what is needed here is for both the LC account and the Folio account to be the same type retirement plan, and the transfers be custodial transfer. My fear is that this is currently not the case and never has been.

Okay Core, while I was posting this, you posted a biggie. Spill the beans ... how do you know?

[core]

Okay Core, while I was posting this, you posted a biggie. Spill the beans ... how do you know?

I didn't hear it from LC myself, and unfortunately I cannot name my source.  However I am completely confident that he/she got it straight from someone at LC.  There is still a slim chance that it's not correct, as often at LC the left hand knows not what the right hand is doing, but so far this is the most plausible response we've heard from them (secondhand).

[Rob L]

Let me be the first to say I hope this is true. LC is finally doing the right thing, presuming my fears are not unfounded.

[New Jersey Guy]

"Your loss is my gain"

Core...I couldn't stop laughing!!
Great Motto!

[core]

Let me be the first to say I hope this is true. LC is finally doing the right thing, presuming my fears are not unfounded.

I certainly do not hope it is true, because I really had my heart set on some killer tax-free trading profits.    I don't know if I can chalk this up as "doing the right thing".  In my opinion they are still engaged in a hush-hush operation.  Why did they not post something on their blog as soon as they figured out there was an issue?  Or at the very least tell the truth after people started calling in to ask?  If this is doing the right thing then I sure don't want to see the wrong thing.

I left out one important piece of the original information:  The source at LC says he/she does not expect the issue to be resolved soon.

"Your loss is my gain"

Core...I couldn't stop laughing!!
Great Motto!

Yes I must struggle to keep things fresh, you know.  That one came from an old PC space-based game, they had these villains called Retros who would say that line to you over the radio right before they blasted your ship apart and stole all of your cargo to resell for profit.  It seemed appropriate enough.

[jimsar]

I have learned a bit about the terminology of "IRA" speak.  An IRA rollover is the movement of funds between 2 types of retirement plans that may be different, such as from a 401(k) plan to an IRA. Rollovers may be subject to federal income tax unless all requirements are met. For example:

    You must complete the rollover within 60 days of receiving the funds (all IRAs)
    You may only roll over funds from the same IRA once every 12 months (Traditional and SEP IRAs)

An IRA transfer is the movement of funds between the same types of accounts, such as from one Traditional IRA to another Traditional IRA, where there is no distribution to you. The money is transferred directly from one financial institution to another on your behalf and is also known as a trustee-to-trustee or custodial transfer. Transfers can take place as often as you like, and they are not taxable.

It is clear what is needed here is for both the LC account and the Folio account to be the same type retirement plan, and the transfers be custodial transfer. My fear is that this is currently not the case and never has been.

Okay Core, while I was posting this, you posted a biggie. Spill the beans ... how do you know?

Rob L, here's another IRA Terminology: DIRECT ROLLOVER. 

"A direct rollover shares some characteristics of both a transfer and a rollover. Direct rollover assets are made payable to the qualified plan or IRA Custodian/Trustee, never to the individual.

A direct rollover is reportable but not taxable and there is no 60 day window to be concerned about."

Lest I be RandPaul'ed, the above quote is attributed to About.com's Investing for Begineers website.