Yes, it does need to be attached. Regarding your situation, there are two types of bad debts, business and nonbusiness. It appears you have taken the position that your debt is non-business, consequently, nonbusiness bad debts must be totally worthless to be deductible. You can't deduct a partially worthless nonbusiness bad debt. However, in your post, it appears that only part of your debt has become worthless. Thus, you may not meet the requirements to include this debt on Form 8949 if in fact only part of it remains worthless.
Regarding your question as to what the attached statement must contain, the IRS provides the following:
A deduction for a nonbusiness bad debt requires a separate detailed statement attached to your return. The statement must contain: a description of the debt, including the amount and the date it became due; the name of the debtor, and any business or family relationship between you and the debtor; the efforts you made to collect the debt; and why you decided the debt was worthless.
Here is the link to the IRS webpage that discusses bad debt deductions where you can find more information about the difference between business and nonbusiness bad debt and how deductions are handled for each type of debt.
Topic No. 453_Bad Debt Deduction
@mikeynyc123
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
