Here's the latest:
Even though the payment plan calls for unsecured creditors to receive 0%, Prosper cannot move the loan into a charged-off status. Prosper is unable to give tax advice but as you may know, you do not have to wait for Prosper to charge off the loan before you claim it on your taxes.
I’m sorry, I forgot that Prosper doesn’t seem to be sending out 1099-B’s or any other official IRS documents for loans that are charged off, just for those which were sold to a JDB before Prosper stopped selling them.
Wow. We can't charge it off even though you're not getting any money from it.
Given this new information, I feel comfortable writing this off on your taxes. I don't know how much you had on this one, but if it's significant, amending 2008 might be in order (unless you've got some ST gains you want to offset in 09 or something).