Yes. According to the IRS, "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. Report a non-business bad debt as a short-term capital loss on Form 8949, Sales and Other Dispositions of Capital Assets. You will report that in the same section in which you report stock and other investment sales. To enter:
- Type "Investment sales" in the search window and click Enter
- Click on "Jump to Investment sales"
- On the page with "Did you have investment income in 2022?" Answer Yes
- On the page with "Did you have crypto income in 2022?" Answer No (you can revisit this section later if the answer is Yes). Then click on Continue
- On the page with "Let's import your tax info" click on "Enter a different way"
- Select "Other" to "OK, let's start with one investment type?" and click Continue
- Enter the name of the person of your brother
- On the page with "Now, enter one sale for __________".
- Indicate "How did you receive this investment?
- Enter the details of the sale, and the interview will walk you through entering the details of the sale
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