You can deduct the loan as a non-business bad debt. It is not a business bad debts unless you are in the business of loaning money, as opposed to doing it as a side-job, where it is considered to be more like an investment. As such, it is deductible against capital gain income and up to an additional deduction of $3,000 per year. The unused amount can be carried forward to future years.
You enter the loss in the Deductions and Credits section of TurboTax, then Other Deductions and Credits, then Nonbusiness Bad Debt. Here is a TurboTax article where you can learn more.