@jj152 wrote:
Same Issue here.
Says online I can file debt forgiveness 1099c as creditor and take as income loss - but Turbotax only allows me to file as debtor? Also, the advice says you can just claim as loss, but doesn't actually allow you to? The 'search' he recommends doesn't give anything helpful?
May have to hire tax person and not use turbotax this year?
You need to explain a lot more details.
If you are in business, and someone doesn't pay you, then generally you don't have any tax deduction. You simply report less income, which results in paying less tax. You might issue a 1099-C, depending on the facts and the type of business you are in.
If you as a private person, pay someone from your already-taxed funds, and they don't deliver, you may have a non-business bad debt. For example, you pay a contractor a deposit on a remodeling job and they skip town or go bankrupt. There are a number of rules you must follow before you can take a tax deduction for a non-business bad debt. And if you are not in business, you generally don't issue a 1099-C to the person who owes you money.
