Investors & landlords

ThomasM125 · ‎April 15, 2025

Since it is a loan, it would be deductible as a bad debt, which gets short-term capital gain treatment. It is deductible against capital gains and up to an additional $3,000 deduction per year. Unused deductions are carried over to the next year. You enter that in the Other Deductions and Credits section of TurboTax, then Nonbusiness Bad Debt. You can learn more in this IRS tax topic 453.

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