Maybe but doubtful. Since this is a business bad debt from over 20 years ago, be sure you qualify and have all the paperwork to back it up where you have been actively pursuing collection along with the original debt and income claimed on tax return. See Topic No. 453, Bad Debt Deduction and Publication 535 for methods of deduction.
I don't believe the IRS will agree that you released valuable property for $20,000. They will be looking for a relative or some other reason why you have let this go which will invalidate your claim.
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