@kklein2092
However,
The non-business bad debt deduction is taken in the year that you determine the debt is uncollectible. You mentioned this happened several years ago. Normally, the company declaring bankruptcy could be used as the date the debt is declared non-collectible. Or, if you are listed as a creditor, you might use the date when the bankruptcy case was closed and it was confirmed that you would not recover anything.
If the debt became non-collectible in a past year, you would have to file an amended return for that year to declare the debt and take the deduction. You can deduct capital losses like this up to the amount of your capital gains plus $3000. Any remaining loss is carried forward to the next year. So, if the debt became non-collectible in 2021 (for example), you would have to file an amended 2021 return. Then if you have a loss to carry over, you would file an amended 2022 return and claim the loss. And if you still had a loss carryover would include it on your 2023 return, and so on.
