Possibly. This is a non-business bad debt. It is entered in the capital gains section on the income page (yes, that's weird, just go with it.) It's a capital loss that you can deduct against other capital gains. If you have no other capital gains, you will deduct $3000 this year and carry the rest forward. (Enter the entire loss, Turbotax will do the carry forward.)
BUT,
With a loan to a family member, if you are audited, expect strict IRS scrutiny. They will expect to see the loan made in a businesslike manner, as if you had lent money to an unrelated business. That means signed loan agreements, a fair market interest rate, and other documentation. You will need to convince this IRS that this was a true loan to a business that you expected to be repaid with interest, and not a "friendly loan" between family members, or worse, a family gift that you are now trying to recover.
