Hello All!
I apologize if the answer is here somewhere, but I could not find it. On the general internet, I found conflicting answers. The IRS documents, while helpful in other ways, didn't help me figure out the time limit to deduct a bad debt from a business that I owned.
Details That May Help-
In 2009, I opened a business as a Subchapter S corporation with LLC status. I was the only shareholder.
The effects of the covid-19 pandemic eventually caused the demise of the business.
When I opened the business, I took $1,000.00 of my wife's & my personal money to purchase things for the business. There is formal paperwork from 2009 showing this loan from our own money.
On 12-31-2022, I formally closed the business. Paperwork was filed as needed with the IRS and the state (Michigan). The 2022 income tax return (1120-S) for the business was the Final Return, as was the K-1.
Every year I have recorded the 1,000.00 mentioned above on 1120-S, Schedule L, Line 22 as Capital Stock. The final return shows the 1,000.00 in the "ending" column. The business never paid us back.
The Question-
Can I deduct this bad debt on our 2023 personal income tax return on Form 8949 as a bad debt?
Or
Has the time limit passed since it is a Personal bad debt?
Thank You for clarifying my confusion. I appreciate it very much.
Paul
