Re: Loan made to LLC

I loaned $15,000 to a family owned LLC (single member) in 2024 and it was supposed to be repaid by 12/31/2024. The business closed shortly after — bankruptcy is being declared. I do not have a stake in the business or the bankruptcy. Can I claim a loss in 2024 and if so how do I do this?

posted

you might be entitled to a short-term capital loss. Taking the deduction may increase your audit risk and without adequate documentation and considering other factors the IRS could deny the deduction and treat it as a gift

see this link and then read the section on intra-family loans

https://www.thetaxadviser.com/issues/2023/jul/bad-debt-deductions-from-intrafamily-advances.html