Yes, you almost surely do. According
to IRS Topic Number 453 - Bad
Debt Deduction,
“A debt becomes
worthless when the surrounding facts and circumstances indicate there's no
reasonable expectation that the debt will be repaid. To show that a debt is worthless,
you must establish that you've taken reasonable steps to collect the debt. It's
not necessary to go to court if you can show that a judgment from the court
would be uncollectible. You may take the deduction only in the year the debt
becomes worthless. You don't have to wait until a debt is due to determine that
it's worthless.”
Please see the TurboTax article How
to Report Non-Business Bad Debt on a Tax Return for more information.
