Discussion:Non-Business Bad Debt
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| Revision as of 06:38, 18 March 2008 Michaelstar (Talk | contribs) (Was this debt li) ← Previous diff |
Revision as of 08:15, 18 March 2008 Skhyatt (Talk | contribs) (No it wasn't lis) Next diff → |
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| {{ForumReplyPost|UserID=Michaelstar|Date=18 March 2008|Text=Was this debt listed in the business bankruptcy? In order to be able to deduct this as a non-business bad debt (unless client is in the business of making loans this is non-business) there needed to be a legitimte loan. If it was listed in the bankruptcy that provides credence that this was a true loan and not a gift. Also, did your client ever receive and/or report interest income from payments made on the loan? }} | {{ForumReplyPost|UserID=Michaelstar|Date=18 March 2008|Text=Was this debt listed in the business bankruptcy? In order to be able to deduct this as a non-business bad debt (unless client is in the business of making loans this is non-business) there needed to be a legitimte loan. If it was listed in the bankruptcy that provides credence that this was a true loan and not a gift. Also, did your client ever receive and/or report interest income from payments made on the loan? }} | ||
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| + | {{ForumReplyPost|UserID=Skhyatt|Date=18 March 2008|Text=No it wasn't listed in the bankruptcy. She did mention that to me. There was a promissory note that they had drawn up by an attorney calling for annual interest payments to be made @ 7%. No payments were ever made. The note became fully due and payable on 12/31/06.}} | ||
Revision as of 08:15, 18 March 2008
Discussion Forum Index --> Advanced Tax Questions --> Non-Business Bad Debt
Discussion Forum Index --> Tax Questions --> Non-Business Bad Debt
| 18 March 2008 | |
| I have a client who loaned her Son approx 60K for his business back in 2002. His business went bankrupt and she is asking me if she can write this off. As I read Section 166, I cannot see a reason why she can't. Am I possibly missing/forgetting something here? | |
Michaelstar (talk|edits) said: | 18 March 2008 |
| Was this debt listed in the business bankruptcy? In order to be able to deduct this as a non-business bad debt (unless client is in the business of making loans this is non-business) there needed to be a legitimte loan. If it was listed in the bankruptcy that provides credence that this was a true loan and not a gift. Also, did your client ever receive and/or report interest income from payments made on the loan? | |
| 18 March 2008 | |
| No it wasn't listed in the bankruptcy. She did mention that to me. There was a promissory note that they had drawn up by an attorney calling for annual interest payments to be made @ 7%. No payments were ever made. The note became fully due and payable on 12/31/06. | |
