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Author Topic: Prosper Sending Out Incorrect 2012 1099-B's  (Read 10459 times)

Xenon481

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Prosper Sending Out Incorrect 2012 1099-B's
« on: February 01, 2013, 10:50:31 am »

Multiple lenders are reporting that Prosper is sending out 1099-B's with significant errors on them.

http://www.lendacademy.com/forum/index.php?topic=690.0

Quote from: jpildis
I just downloaded my and my wife's Prosper 1099s from Prosper and they are wrong... both have bogus entries in the charge-off sections that hugely inflate our losses.  Each 1099 had an extra entry that showed a single-loan loss that exceeds $4,000.

Quote from: neals384
[...] I saw all the charge-offs categorized as long-term, when in fact they were held less than one year.

Quote from: neals384
Also the 1099-B transactions don't add up to the totals on the 1099-B summary.  As best I can tell, folio sales have been omitted from the detail but included in the summary.

DCS

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #1 on: February 01, 2013, 11:00:04 am »

Since it's been more than three years since my last bid on Prosper, I only have a few recovery items for 2012 to consider for taxes.

Prosper's 1099 says $3.80 in long-term gains for 2012.

Adding up all the interest items for 2012 on Prosper's loan history pages says $4.58 interest for 2012.

Since it's such a small amount, I'm not planning to do anything about it.  But it is interesting that they're calling the recoveries LTCG and that the amounts are different from the loan history pages.
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tuneman1980

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #2 on: February 01, 2013, 11:13:18 am »

I have a single transaction showing.

Description               Cost or other basis
38625-41 Bankruptcy $3,427.48

So that significantly affects my total cost.  I'm guessing that is the total loss for the loan and not adjusted per individual.

Is anyone else seeing transactions like these.  Hopefully they issue a statement and adjust the 1099's quickly.
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Beerbud1

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #3 on: February 01, 2013, 11:23:36 am »

Prosper says I had $185 in recoveries in 2012. How much did you get?
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ira01

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #4 on: February 01, 2013, 12:27:44 pm »

Prosper says I had $185 in recoveries in 2012. How much did you get?

$0.00.  Same as always. 
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Xenon481

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #5 on: February 01, 2013, 12:34:59 pm »

Nominating to The Lobby.

JackFlash

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #6 on: February 01, 2013, 12:38:33 pm »

I didn't do squat in 2012 and mine says:



2012
1 Original issue discount for 2012: $6.20
3 Early Withdrawal Fee: $0.00
4 Federal income tax withheld: $0.00





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Xenon481

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #7 on: February 01, 2013, 12:47:57 pm »

I didn't do squat in 2012 and mine says:

2012
1 Original issue discount for 2012: $6.20
3 Early Withdrawal Fee: $0.00
4 Federal income tax withheld: $0.00

Sounds like Prosper is claiming that you purchased a Borrower Dependent Note in 2012 and also got a rebate for it. I assume that box 1 is referring to the lender rebates.

yankeefan

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #8 on: February 01, 2013, 01:28:59 pm »

They also classify recoveries as long term gains- but I think they are short term to match the short term losses I took when I wrote them off.

ETA-  They do have the correct amount of proceeds for my account.  (119.58- all of it recoveries).
« Last Edit: February 01, 2013, 01:33:43 pm by yankeefan »
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tuneman1980

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #9 on: February 01, 2013, 01:59:12 pm »

Just got an email stating that for some investors new 1099's will be issued.

"This morning we notified you by email regarding the online availability of your 2012 tax statement (1099). We have since discovered a processing issue that affected a small number of investor accounts including yours.
If you have already retrieved your 1099 tax statement, you should discard it. We expect to have an amended 1099 completed within the next few hours and will update you when it's available. We regret any inconvenience this may have caused, and thank you again for being an investor with Prosper."
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Xenon481

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #10 on: February 01, 2013, 02:01:37 pm »

By "small number" I suspect that they actually mean "most", judging by the number of reports that came from relatively small subset of lenders.

ira01

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #11 on: February 01, 2013, 04:05:55 pm »

By "small number" I suspect that they actually mean "most", judging by the number of reports that came from relatively small subset of lenders.

Well, that's still a "small number" compared to the number of people living in the United States.   :ninja:
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112233

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #12 on: February 01, 2013, 08:10:02 pm »

Is there a way to appeal a bogus 1099 that a company doesnt fix?
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JackFlash

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #13 on: February 01, 2013, 11:44:42 pm »

Is there a way to appeal a bogus 1099 that a company doesnt fix?


Go ahead and report the income you believe is correct, but the mismatch may trigger an IRS audit of your tax return. If so, simply provide the auditor with documentation for how you calculated your income, and inform them that the 1099 from Prosper was incorrect. Then the IRS may audit the company.

The 1099 should just be a summary of how much money prosper paid you. If your receipt of payments and/or deposits from prosper differ, you have the winning argument on your side and Prosper will be singing the blues. I'd recommend printing out 2 records. Your Month to Month statements from Prosper and your Bank Account.

If you are on the side of righteousness, Prosper will be crying.  Although I would first confront Prosper to correct your 1099. If they refuse or are lazy about it, just let them know that you'll be filing a corrected 1099 with documentation to back it up and they can answer to the IRS when they come knocking.
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mothandrust

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Re: Prosper Sending Out Incorrect 2012 1099-B's
« Reply #14 on: February 02, 2013, 03:44:08 am »

$289.30 in Long-Term as "Recovery" payments on the eandr123 loan that is now paid-in-full.

I would have liked it if they separated out the 28% collection agency fees as investment expense, especially since that both collection agencies chosen by lenders were switched by Prosper to one that charged almost double the fees and did no demonstrable work to earn those fees.  And to add insult to industry, Prosper continued to charge a servicing fee in addition to the collections fee, as if the loan were being serviced in two places at once.

The sum of these fees was higher than the interest rate on the loan, so Prosper was taking not just all the interest, but also some principal away from lenders.
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