Can I deduct a recently settled ,defaulted small business loan, which I am currently paying off although that original business no longer exists and has not since 2013?

[detrev209]

It was deductible when the business was in operation, but the business closed and I stopped paying....just settled with the US Gov't. If it was deductible then, it should be deductible now. yes?

[Anonymous_]

Deductible in what sense?

If you took out a loan, the loan itself is not deductible; only the interest is deductible.

[ThomasM125]

The loan repayment would not be deductible, as stated by @Anonymous_, only the interest if allowable. It would not seem to be allowable, however, as you can only deduct business expenses that are ordinary and necessary as they relate to a business. Since you are no longer in business, the expenses are neither. You may have been able to amend the return during which time you were in business and deduct the expenses that way, but you can only go back three years to amend a return, so that is not an option unfortunately.