Poll

Is is worth investing in LendingClub as an alternative to current fixed income investments such as Municipal Bonds, AFTER TAXES?

No, I cant make money even before taxes, even A-Grade loans are going south
1 (12.5%)
I have no clue
1 (12.5%)
After taxes I'm fine, I still make .0005% just like my grandma
2 (25%)
I have no clue
0 (0%)
Yes, I'm making more money than fixed, I'm in heaven
4 (50%)

Total Members Voted: 8

Voting closes: April 11, 2019, 05:29:28 PM

Author Topic: TurboTax Tips for Investors with large number of charged off notes  (Read 279 times)

Reginald

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Notes on IRS Filing of Very Larger numbers Lending Club Records with Turbo Tax

Turbo Tax Error: "Your transmission did not go through. Please try again later"


By Reginald D. Sluggowski III
Tax Expert
04/11/2018
Summary: 
Do NOT import LendingClub data directly with Turbo Tax (any version) or you will be in a world of pain: Your processing will slow to a crawl, the totals on forms 8949 and Schedule D . Instead Open the two 1099 forms (for each account) in the FORMS view rather than in the Step-by-Step Dialoge. They are: 1099-OID (interest found on page 4 of the tax packet) and 1099-B (bartered transactions ie carryover losses and recoveries). The 1099-B has 2 sections, Short Term , and Long Term. (box A and D respectively) the relevant data is the the sub-totals for each category of transaction. Do not report individual transactions list the sub-totals as a single transaction use the oldest transaction date of each group as the date of purchase and the newest transaction date of each group as the date of sale. Let Turbo Tax total the two.

PROBLEM:

Problem was due to LENDING CLUB transaction details in the Turbo Tax Form being just too large.  Surprisingly, Turbo Tax did not detect this as a problem, which shows you they dont really test their software in real life situations. 

SOLUTION: WHAT WORKED  FOR ME:

1. Make backup copy of the Turbo Tax file (found in ~/Documents/TurboTax/
2. Open the Return
3. Open Forms View (not step-by-step)
4. Find the 1099-B  (not the OID) for each Lending Club account
5. Delete the forms (use the menu at the bottom of the form when viewing it)
6. Add a new 1099-B.  Instead of listing each transaction, just use the sub-totals of the short term and long term (on your lendingclub pdf file - let TurboTax do the totals. Rememeber that each 1099-B worksheet has two parts - the top part you should use the pulldown for box-A,  the bottom half should use the pulldown menu item for box D (long term losses) .

This way the totals on form 8949 actually get calculated correctly! 

PREVENTING  THE PROBLEM:   (lesson learned- best practice for NEXT YEAR)

Do NOT import LendingClub data directly with Turbo Tax (any version) or you will be in a world of pain: Your processing will slow to a crawl, the totals on forms 8949 and Schedule D . Instead Open the two 1099 forms (for each account). They are: 1099-OID (interest found on page 4 of the tax packet) and 1099-B (bartered transactions i.e., carryover losses and recoveries). The 1099-B has 2 sections, Short Term , and Long Term. (box A and D respectively).


Re the 1099-B  - note there are two sections to the Worksheet One for Box A (short term) losses and One for Box D (long term losses) you need not fill out every field. Use LendingClub's SUB-TOTALS within the consolidated 1099-B as entries. Do NOT use every single transaction. Especially if its more than 1000 transactions. Use the oldest and newest transaction date for the buy and sell date respectively.


« Last Edit: April 18, 2018, 05:11:18 PM by Reginald »

J2E

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Re: TurboTax Tips for Investors with more than 100 notes
« Reply #1 on: April 13, 2018, 08:31:25 PM »
Interesting because I imported mine just fine and didn't encounter any errors.  I'm well over 100 loans.

Joe6Luck

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Re: TurboTax Tips for Investors with more than 100 notes
« Reply #2 on: April 16, 2018, 01:03:59 AM »
6. Add a new 1099-B.  Instead of listing each transaction, just use the sub-totals of the short term and long term (on your lendingclub pdf file - let TurboTax do the totals. Rememeber that each 1099-B worksheet has two parts - the top part you should use the pulldown for box-A,  the bottom half should use the pulldown menu item for box D (long term losses) .

I reported it in the same way (sub-totals of the short term and long term) this year and last year. Worked well.

Edwardnut

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Re: TurboTax Tips for Investors with more than 100 notes
« Reply #3 on: April 18, 2018, 12:51:43 AM »
Thanks for the tip. It helped me a lot. It's very useful to me.

Reginald

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Re: TurboTax Tips for Investors with more than 100 notes
« Reply #4 on: April 18, 2018, 05:09:48 PM »
Interesting because I imported mine just fine and didn't encounter any errors.  I'm well over 100 loans.
  Correction meant 1000 chargeoffs.  I'm not sure where the limits are, but if you have only 100 notes it probably will import OK.  At somepoint (over 1000), it will not only make Turbo Tax run slower, it may not submit (efile transmission) or print correctly. I've hit all three problems - most of it due to charged off loans. I had over 1000 chargeoff's this year again. My end of the year report was 56 pages long.