Are you referring to a nonbusiness debt or a business related debt?
Nonbusiness bad debts are treated as short-term capital losses in the year the debt became worthless. You claim a bad debt in Part I of Form 8949. You must attach a statement to the form providing details about the bad debt, which include the following:
- The name of the debtor and your relationship to that person.
- The amount of the debt and when it was due.
- The efforts you made to collect the debt.
- The reason you believe the debt to be worthless/uncollectible.
Or are you referring to a loan between a partner and the partnership? Please clarify. Also review Mike9241 explanation of outside basis above.
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