How to enter into TT Prosper Funding 1099-B

[loyal-but---user]

Dear TT or Tax Experts,

Prosper Funding generated a 190-page 1099-B for 2023, and does NOT support TT Import (I do not see it from the Search For Your Financial Institution drop-down window). Of the 190 pages of info, there are 57 pages of "Short-term transactions not reported..." and 140+ pages of "Long-term transactions not reported..." 

Near the top of the form, there is a section under the bold title of:

Form 1099-B: Proceeds From Broker and Barter Exchange Transactions Original

In this section, there are only 2 line items that have numbers: "Proceeds" and "Cost or other basis".

Questions:

1. Is this the summary section?

2. Should I enter "Proceeds" and "Cost basis" in TT?

3. If yes, where do I enter "Proceeds" and "Cost basis" in TT?

4. On the TT "Now, enter one sales total on this Prosper Funding 1099‑B" page, do I select "Long-term basis not reported" or "Short-term basis not reported"?

Thank you very much!

[RobertB4444]

You're going to enter summary totals.  So you'll need to take the totals for each section - "Short term transactions where basis is reported to the IRS (covered)" and "Short term transactions where basis is not reported to the IRS (non-covered)" as well as the same for long term.  

You will enter each of the four amounts as summaries into the tax return.  The system will prompt you.  Then, you'll need to mail in the broker statement.  You can do this one of two ways.  

You can mail in the whole tax return and include the brokerage statement.  Or you can efile the return and mail in the brokerage statement along with form 8453 which TurboTax will include in your return.

@loyal-but---user 

[loyal-but---user]

Hi RobertB4444,

Really appreciate your prompt advice!

But there are 50+ pages of Short-Term and 130+ pages of Long-Term on the 1099-B, with NO totals for each section except what is listed near the top of the form "1d. Proceeds" and "1e. Costs" line items under the bold-faced title of:

Form 1099-B: Proceeds From Broker and Barter Exchange Transactions Original

It could take many hours if not days to manually sum up the title of each of the Long-Term or Short-Term sections.

Is there a simpler and easier method?

Thank you so much!

[RobertB4444]

No.  Somewhere on that form they have probably totaled those sections.  They often do it on the first page.  Adding up the numbers to get the totals, as an alternative, IS the shortcut.

@loyal-but---user 

[loyal-but---user]

Prosper Funding LLC is a "peer-to-peer lending market place".

As an investor, I put up an amount of money, that is parsed into small amounts then, together with amounts from other investors, lent to individuals who want to borrow money for a fee (interest).

A loan may be fully paid and investors make a little money, or it may be "charged off" if the borrower defaults.

Question: what is the "type of investment" to enter each sale manually? Is it:

Stock (non-employee) or Bond from the drop-down menu?

(assuming they are definitely not "cryptocurrency", "mutual fund, index fund or ETF" or "bond")

Thank you!

[RobertB4444]

Are these actual sales?  Or are they loans earning interest?  Interest earned on loans is in a different category of income.  

If these loans have been bundled up and sold around and you owned pieces of them then they are mutual funds.

@loyal-but---user 

[loyal-but---user]

Similar to Upstart and Lending,

"people can invest in each other through Prosper in a way that is financially and socially rewarding. Borrowers apply online for a fixed-rate, fixed-term loan between $2,000 and $50,000. Individuals and institutions can invest in the loans and earn attractive returns.

Prosper handles all loan servicing on behalf of the matched borrowers and investors.

Prosper Marketplace is backed by leading investors including Francisco Partners, Institutional Venture Partners, Third Point, and Jefferies."

(text between double quotes are taken from the Prosper website.

[loyal-but---user]

PS. Prosper provides only 2 tax forms,

1099-OID

and

1099-B

What type of investment is this?

Is the TT 1099-B section to replace to enter sales listed on the 1099-B?

Thank you so much!

[RobertB4444]

Yes.  1099-B is for sales of investments.  So you are buying and selling these small loans.  And you will enter them as sales.

1099-OID is interest.  Enter it there.

@loyal-but---user 

[loyal-but---user]

Really appreciate the expert clarification!

Followup question:

What type of investment is this in TT,

1. Stock

2. Fund

3. Bond

4. Options

Thank you so much!

[DaveF1006]

It depends. For the sale of the loans, here is how to enter. 

1. Open your return
2. Go to Federal or Federal Taxes
3. Go to Wages and income
4. Scroll down the screen until to come to the section “Investment Income”
5. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’  
6. The first screen will ask if you sold any investments during the current tax year (This includes any sale of real property held as an investment property so answer “yes” to this question)
7. Since you did not receive a 1099-B, answer “no” to the 1099-B question
8. Choose type of investment you sold - select everything else
9. What type of investment other

For the 1099 OID:

1. Sign into your TurboTax account.
2. Open or continue your return and then search for this exact phrase (we recommend you copy/paste from here): 1099-oid original issue discount.
3. Select the Jump to link from the results list.
4. On the Miscellaneous Investment Income screen, select the first box for Form 1099-OID.
5. Select Continue.
6. Answer Yes on the next screen, and continue to follow the on-screen instructions to import or manually enter your 1099-OID.
7. If you land on the Form 1099-OID Summary screen, select Add Another Payer, and then follow the instructions to import or manually enter.

To remove an unwanted 1099-OID, follow Steps 1-3. This will bring you to the Form 1099-OID Summary screen where you can select Delete next to the unwanted 1099-OID.

@loyal-but---user