tax burden of lending club investment...

[FuckRx]

i'm single and in the high income range making over 200k/year. currently investing in lending club and wanted to know how much i will get taxed on any income from lending club...

[beltim]

Interest income from Lending Club will be taxed at your marginal tax rate, plus a 3.8% tax on unearned income (Medicare contribution) if applicable (https://www.fidelity.com/viewpoints/personal-finance/taxpayers-guide).

[FuckRx]

so doing the math I would be left with something like 5.1% vs the 8.3%...
is that good, bad?

[chasesfish]

Mashori - I would steer clear of lending club for now.  The tax burden is high, but returns are really falling off now that institutional investors are after the higher yielding notes.  I've slowed down my investing and seen my returns fall from 8-10% to 2-3% now that I'm a couple of years into the portfolio.  This much reporting pain for a 3% return is awful.

[Rust]

I'd recommend you remove that image from  your post.

No need to share your account number with the world.

It's just the IT auditor in my speaking.

You'd be surprised with the amount of information you can get by just having that number exposed.  I'll send you a PM and show you what I've learned about you in less than five minutes based on information you've shared.

[mpbaker22]

Mashori - I would steer clear of lending club for now.  The tax burden is high, but returns are really falling off now that institutional investors are after the higher yielding notes.  I've slowed down my investing and seen my returns fall from 8-10% to 2-3% now that I'm a couple of years into the portfolio.  This much reporting pain for a 3% return is awful.

How are your returns been so low?  What type of filters do you have?
I've only been doing it for a year, less actually, but LC calculates my return as still being ~16%.  Actual return is more like 12-13% assuming current late loans become charged off entirely.  But it seems like my returns would be almost entirely during this period where you've had 2-3% returns.

[Nilbog]

Mashori - I would steer clear of lending club for now.  The tax burden is high, but returns are really falling off now that institutional investors are after the higher yielding notes.  I've slowed down my investing and seen my returns fall from 8-10% to 2-3% now that I'm a couple of years into the portfolio.  This much reporting pain for a 3% return is awful.

How are your returns been so low?  What type of filters do you have?
I've only been doing it for a year, less actually, but LC calculates my return as still being ~16%.  Actual return is more like 12-13% assuming current late loans become charged off entirely.  But it seems like my returns would be almost entirely during this period where you've had 2-3% returns.

I agree.  I've been investing with LC since 2007 and while you do have to spend more time managing it than in the past, I haven't seen any impact in returns.  On days that I've needed to, I haven't had issues investing $500+ / day in the type of loans I'm interested in.  (If you have a super specific filter then sure, you'll have a harder time).

[Rbuckyfuller]

Hey all.

I'm planning to open a lending club IRA, but noticed that there is a $100 fee if I don't put in $5k or $10k in 2 years.   Problem is that I don't think I'm ever going to convince my wife to do lending club as more than a "trial" attempt.

I don't want to do a taxable account because it is all normal income and doesn't get the chance to build up.  Is there a way that I can do an IRA with a different provider i.e. my current broker and then invest the money with Lending Club?

I likely could convince my current broker to remove any administrative fees.