We are not aware of other tax software where you can electronically upload the required statement describing the details of the bad debt. This does not mean such software does not exist, it is just that we are not aware of any.
It appears from your post that both debts are now worthless, but then again, if you must defend your position that the debts are worthless, the burden rests with you. In other words, you need to prove your case with documents, which could include sworn affidavits from witnesses. Admittedly, this is not an easy burden and arguably, the greater the debt which appears to be now worthless, the greater the audit risk.
In terms of recharacterizes your loans as something else, such as an equity investment, for that you will need to discuss the matter with your personal tax advisor. The question you raise is a good one because loans, depending on the facts, can be characterized as investments, but here again it requires the thoughtful analysis of another professional and is beyond the scope of advice we can provide.
@mikeynyc123
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