Harmoney

[Bjauck]

they are claimable, Like I have said, I have checked with the IRD, you guys should check for yourself though.

and I did ask harmoney this, but they just gave some generic stupid answer...

Thanks for the communication with Harmoney.
I agree that fees should be deductible for all. It would be great for a clear public statement from the IRD and Harmoney on that point.

If lender fees are claimable by all, then Harmoney and IRD should state that fact definitively and arrange for RWT to be deducted on the Gross interest less fees basis. I have seen no reports that either have made definitive statements. As I am a small retail investor, I would be in the category of investor that would be least likely of all investors to be able to claim fees. I feel prudence would suggest not being able to claim even Harmoney fees let alone charge-offs.

I am still awaiting official guidance to the effect that, as there is considerable work (more than with a term deposit for example) involved with a Harmoney investment for even a small retail investor, the net blended return is all that is taxable. That has not been forthcoming, unfortunately.

[777]

Those of you deducting write-offs against interest are setting yourself up for an audit. Be careful. It is capital you have lost , not revenue.

[Bjauck]

Given the fee structure and the fact that harmoney (on behalf of individual retail investors) have not sought a ruling on the deductibility status of fees and charge-offs, I think Harmoney may be content to rely on its business investors. Then is it a true peer-to-peer, when the balance is perhaps tipped to business lenders lending to mostly individuals?

[Investor]

Given the fee structure and the fact that harmoney (on behalf of individual retail investors) have not sought a ruling on the deductibility status of fees and charge-offs, I think Harmoney may be content to rely on its business investors. Then is it a true peer-to-peer, when the balance is perhaps tipped to business lenders lending to mostly individuals?

I don't agree. Your statements don't support your conclusion.

[Bjauck]

I don't agree. Your statements don't support your conclusion.

The conclsion I made was that Harmoney may be content to rely on its business lenders. In what way could my statements not support that concusion?

I posed the question: Then is it a true peer-to-peer, when the balance is perhaps tipped to business lenders lending to mostly individuals?
Do you disagree with that?

[beacon]

Harmoney is now forecasting a 4-5% static loss across the portfolio over the life of the loan. If I remember right, this is 1% higher than previous guidance on what was supposed to be a less risky, better debt selection and approval (which shaved off investor returns six months ago) process. What a shame! First mover advantage, still the best P2P scale, but such lax processes...

Squirrel is still forecasting 1% losses on the platform. No wonder bidders seem to be jumping their queues over there...

If Harmoney was a listed share, I'd be looking to knock 20% off its share price, and expecting some managers to be fired ...

[Bjauck]

Harmoney is now forecasting a 4-5% static loss across the portfolio over the life of the loan. ...

Ouch! As the average loan seldom runs for the inital 3 or 5 year term, that is quite a hit.

[BJ1]

Sorry people but it isn't Harmoney's role or responsibility to provide tax advice. Accountant's may do that but their advice is nearly always tinged with disclaimers so that is hardly a safe source. The tax act does entitle costs incurred in deriving income to be deducted so the remaining question is if bad debts are deductible - and there is guidance in the Act that can lead to a justifiable decision that they are. If the IRD disagrees and you have justifiable reason to have determined what you did then the normal worst is you pay the tax only. But don't take this as advice from me. It's just my opinion.

[777]

Sorry people but it isn't Harmoney's role or responsibility to provide tax advice. Accountant's may do that but their advice is nearly always tinged with disclaimers so that is hardly a safe source. The tax act does entitle costs incurred in deriving income to be deducted so the remaining question is if bad debts are deductible - and there is guidance in the Act that can lead to a justifiable decision that they are. If the IRD disagrees and you have justifiable reason to have determined what you did then the normal worst is you pay the tax only. But don't take this as advice from me. It's just my opinion.

And very well thought out opinion.

[Vagabond47]

Harmoney is now forecasting a 4-5% static loss across the portfolio over the life of the loan.

Surely 80% of that %5 is concentrated in the E & F grades? so if you avoid those can we reasonably expect <2% loss in the better grades (A-C).