Please see: <a rel="nofollow" target="_blank" href="
https://www.irs.gov/publications/p550#en_US_2016_publink100010585">https://www.irs.gov/publications/... includes this language:
"Make sure you report your bad debt(s) (and any other short-term transactions for which you did not receive a Form 1099-B) on Form 8949 with box C checked.
For each bad debt, attach a statement to your return that contains:
A description of the debt, including the amount, and the date it became due;
The name of the debtor, and any business or family relationship between you and the debtor;
The efforts you made to collect the debt; and
Why you decided the debt was worthless. For example, you could show that the borrower has declared bankruptcy, or that legal action to collect would probably not result in payment of any part of the debt."
The way I see it is you will tell the IRS what you did to collect the debt. The year you gave up taking "reasonable steps" is probably the year the debt became worthless. You have seven years in which to file an amended return to receive a refund -- this is an exception to the usual 3-year rule for amendments. So arguably, if you took any "reasonable steps" to collect on the debt in 2010 or later before deciding it was worthless, then you can still amend your tax return for the year the debt became worthless.
