Author Topic: Folio and IRAs  (Read 110921 times)

Rob L

  • Hero Member
  • *****
  • Posts: 2049
    • View Profile
Re: Folio and IRAs
« Reply #90 on: November 05, 2013, 08:46:37 PM »
First lets stop the bleeding. Core, your "I have no recollection, Senator" probably would not have worked anyway. I'm not saying LC did the right thing, but they will soon be taking the first step in doing the right thing. Yes, IRA / Folio trading should have been electronically stopped dead in its tracks the day LC posted that obscure but unambiguous message. Maybe it was the "deer in the headlights" effect. For the third or fourth time I'll say "this is a big deal"!

jimsar; it's alphabet soup and past my pay grade. Like a square peg in a round hole whatever you call it I fear IRA LC and Folio don't mix and never have.

core

  • Hero Member
  • *****
  • Posts: 1784
  • Your loss is my gain
    • View Profile
Re: Folio and IRAs
« Reply #91 on: November 05, 2013, 09:03:24 PM »
Now I'm wondering what this is going to do to the Folio market.  It's possible that a large percentage of Folio buyers might be doing their buying in an IRA and don't even have a taxable account.  I would be interested in those stats.  Once all those people can no longer buy the market could absolutely plummet.  (Or maybe it will skyrocket, if they were all sellers?)  Hell if I know.  Looks like I picked the wrong week to stop sniffing glue.

Are they going to warn people, or just abruptly shut things down?  If I was holding notes that I didn't really want to hold, I would be absolutely fuming when I got stuck holding a 5-yr portfolio of absolute crap with no way to sell it.  After the announcement there could be quite some deals to be found.  Man this could be a mess for a while.  Just when I thought the note market was recovering.

GS

  • Sr. Member
  • ****
  • Posts: 413
    • View Profile
Re: Folio and IRAs
« Reply #92 on: November 05, 2013, 09:27:56 PM »
This blows.  My strategy is built around selling notes if their FICO slips.  I never would have opened an IRA under these conditions, and now I feel my money is trapped there since there is no way to exit, ... outside of letting my notes die off for the next 5 years. 

jimsar

  • Jr. Member
  • **
  • Posts: 50
  • Stuff Happens
    • View Profile
    • Email
Re: Folio and IRAs
« Reply #93 on: November 06, 2013, 02:34:52 AM »
jimsar; it's alphabet soup and past my pay grade. Like a square peg in a round hole whatever you call it I fear IRA LC and Folio don't mix and never have.
I'm afraid you're right, so please indulge me while I add more alphabets to the soup: SOL and IRS .  If taxman declares Folio transactions as IRA distribution, well, you get the picture.


nonattender

  • Hero Member
  • *****
  • Posts: 713
  • I am not here.
    • View Profile
Re: Folio and IRAs
« Reply #94 on: November 06, 2013, 09:24:07 AM »
Did someone drop a dime on all the self-dealing and IRA stuffing that I presume goes on or is there really a structural legal issue wrt LC/F?
A little nonsense now and then is relished by the wisest men.

DanB

  • Hero Member
  • *****
  • Posts: 665
  • A lie told often enough becomes The Truth!
    • View Profile
Re: Folio and IRAs
« Reply #95 on: November 06, 2013, 01:40:13 PM »
Did someone drop a dime on all the self-dealing and IRA stuffing that I presume goes on or is there really a structural legal issue wrt LC/F?

A conspiratorial mind might even suggest that perhaps a reasonably intelligent hardcore LC member might have dropped the dime in exchange for immunity on some other white collar criminal activity they may have engaged in. Of course I would never suggest or believe something like this to be possible but you never know, I suppose.  :)
« Last Edit: November 06, 2013, 01:49:09 PM by DanB »

Rob L

  • Hero Member
  • *****
  • Posts: 2049
    • View Profile
Re: Folio and IRAs
« Reply #96 on: November 06, 2013, 07:50:59 PM »
I wondered if, embedded in all the changes today, was the electronic prohibition of IRA accounts listing notes on Folio. It, so far at least, was not. I just successfully listed a note (at a ridiculous premium) for about 20 seconds. Took it right back down again, but LC still let me do it.

Must be all those wonderful upgrades made to the trading platform today were much more important than this triviality.

neals384

  • Full Member
  • ***
  • Posts: 107
    • View Profile
Re: Folio and IRAs
« Reply #97 on: November 18, 2013, 11:05:01 AM »
I have no P2P IRA, my interest here is academic. I wonder a few things. Does Prosper allow IRA/Folio trading? I don't find anything on the Prosper website saying either way. Is there any potential liability (to either investors to the the gov't) on LC and P for allowing improper trades?

When Prosper first allowed IRA accounts they prohibited Folio trading.  Starting sometime earlier this year, folio trading for IRAs is now allowed.  No explanation was given, but one supposes the delay was for them to resolve iRS issues. 

lender_john

  • Jr. Member
  • **
  • Posts: 88
    • View Profile
Re: Folio and IRAs
« Reply #98 on: November 18, 2013, 02:51:09 PM »

I'm just wondering what the best course of action is for those in Folio only states that have an IRA.

Just sit there and wait for clarification from LC?
Wait for years and then transfer to a different IRA?

It seems like if this was resolved at Prosper, they could allow trading again at LC.

core

  • Hero Member
  • *****
  • Posts: 1784
  • Your loss is my gain
    • View Profile
Re: Folio and IRAs
« Reply #99 on: November 18, 2013, 03:21:49 PM »
I'm just wondering what the best course of action is for those in Folio only states that have an IRA.

I didn't know that was even possible.  Earlier this year I know someone who tried to open one and LC said they were unable to open IRAs for Folio-only people.  If I remember correctly SarahV also had similar experiences.

lender_john

  • Jr. Member
  • **
  • Posts: 88
    • View Profile
Re: Folio and IRAs
« Reply #100 on: November 18, 2013, 03:45:13 PM »

It was certainly possible and has been possible for years. I would assume, as you said, that it is not allowed now.

This puts the owner in quite a potential pickle.. as their only interaction with the notes has been through Folio.

If there is a problem, the blame is clearly on LC here... They advertised the IRA, allowed the creation and they well know that the only way for the person to buy notes is through Folio.

Inflationhawk

  • Newbie
  • *
  • Posts: 38
    • View Profile
    • Email
Re: Folio and IRAs
« Reply #101 on: November 23, 2013, 02:55:48 PM »
New to P2P.  So if I am reading this right, Prosper allows IRAs to trade on Folio, but you can't sell late notes.  On LC, you can sell late notes on Folio, but you can't trade on Folio in an IRA account.  Sounds like with LC, it's just a matter of time to get it approved since Prosper is already doing it.  But, with Prosper, is there any thought on them ever allowing late notes to be sold on Folio?  Overall, I like LC better and have started funding an IRA account, but I'm kinda bummed about the folio restriction which I didn't know about until after I signed up.  Based on what I'm reading, it seems likely LC will get this worked out...I hope!  Learning a lot on here, thanks for all the great posts.

Rob L

  • Hero Member
  • *****
  • Posts: 2049
    • View Profile
Re: Folio and IRAs
« Reply #102 on: December 01, 2013, 07:00:18 PM »
Just briefly tested the waters and I am still able to list notes list notes for sale, even though my account is IRA.
So far LC has not "done the right thing" and electronically prohibited this.

Core: talk to deep throat again and see what gives.

GS

  • Sr. Member
  • ****
  • Posts: 413
    • View Profile
Re: Folio and IRAs
« Reply #103 on: December 01, 2013, 08:44:19 PM »
Hopefully the fact that LC had not yet cut off folio sales is because they are trying to resolve the issue (whatever the issue may be) without cutting off their users.  This may also explain why they only posted the notice in some obscure location on the website rather than in a more obvious location, like the click through screen.  Or ... Maybe current users are permanently grandfathered in ...

core

  • Hero Member
  • *****
  • Posts: 1784
  • Your loss is my gain
    • View Profile
Re: Folio and IRAs
« Reply #104 on: December 01, 2013, 08:53:40 PM »
Core: talk to deep throat again and see what gives.

Deep Throat is unlikely to have additional information as he is not directly mixed up in the LC Plumbers operation.  But keep in mind one man's "soon" is another man's "later".  If I get any other information I will of course report it.  Too bad Tricky 'Peter' is sworn to secrecy, as I'm sure he already has a full article prepared.  Chock full of propaganda about how this is a good thing for P2P, how 99% of investors are not affected, and of course completely dodging the issue of the cover-up.

If you want my conspiratorial guess, I would say LC is planning on conveniently taking advantage of the new year to further their deceit.  Reminds me of Tet back in 'Nam! 

Here's how I think it's going to go down:  On Dec 30th they will announce that due to "changing tax laws", trading in an IRA will not be allowed as of Jan 1 2014.  (Trades will need to be settled before then, thus the advance notice.)  Tax laws are always "changing", so this will not be a direct lie.  They will be hoping investors don't put 2 and 2 together and realize they might be in a pickle for previous years.  If nobody gets tagged by the IRS and gets vocal about it, LC gets off scott free.  They can quietly settle with those that do get snagged.  But by the time the lumbering IRS gets around to going after people, I think the statute of limitations will already be expired for civil matters such as this so you may find it difficult to sue LC.  You will, of course, still be on the hook for the tax bill.
« Last Edit: December 01, 2013, 08:56:04 PM by core »