Closng the Lending Club IRA account

I contacted Lending Club to see if there was an option to get rid of the last 3 very bad notes in my IRA account. Much to my surprise there was one, forfeit. They sent a form that is used to close the Lending Club account and send the remaining funds to Strata (the IRA custodian). Theoretically then Strata subtracts their account closing fees and send the remaining cash.

The form has the following sections.

1.       Account Information – Identifies owner and account information.

2.       Type of Distribution – Several checkbox alternatives. In my case, I indicated it was a normal distribution from a traditional simple IRA.

3.       Select your Account Closure and Distribution Options – This section presents the options available to deal with your remaining notes. There are two choices. You can close your account and transfer your notes a to taxable account. Or you can elect to forfeit the notes to Lending Club. This is the option I chose. You also specify what you want Strata to do with the resulting cash in your IRA account. I selected sending a check by U.S. Mail.

4.       Federal and State Tax Withholding Election and Information – I elected to have 10% withheld for federal taxes. You do have the option to waive withholding taxes.

5.       Lending Club Investor Account Closure Statement – A place to initial agreeing to the forfeiture of remaining notes and closing of the account.

6.       Signature – Section to sign and date the form.

7.       Spousal Consent – If Closing Lending Club Account – Apparently spousal consent is required if you live in a community property state. I checked the box saying I did not.

They did provide a list of the Strata fees.  I will incur a $50 fee for “Full Account Termination (Account Value <$10,000)”.

I submitted the completed form by Email today, April 25^th, 2018. I will followup with another post when I get more information on how the process is going. Follow me on Twitter @billlanke to know when I do this.