This TurboTax Help states:
Generally, you cannot take a deduction for a bad debt from your regular income, at least not right away. It's a short-term capital loss, so you must first deduct it from any short-term capital gains you have before deducting it from long-term capital gains.
Finally, you can deduct up to $3,000 of any remaining balance from other income. If a balance still remains, you can carry it over to subsequent years.
In both TurboTax Online and TurboTax Desktop, enter 'nonbusiness bad debt' in the Search engine in the upper right hand corner of the screen. Select 'Jump to nonbusiness bad debt'.
Or follow the excellent directions of @DianeW777 above.
@wgolab
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