I paid 2000 for a piece of art. I gave it back to the gallery for consignment. The purchaser of my consignment art stopped making payments, far short of the price. Can I write this off as a loss? What documentation do I need? Thanks
You have what is called a "Non-business Bad Debt" and yes, it can be deducted if it not collectible.
You will need to show the amount that was owed to you, for example, $1,500 and let us say $600 paid, then you had $900 coming and this was not paid. Your loss in my example is this $900, which would be the Short-term capital loss.
Documentation. The art gallery detail on the consignment, the price agreed to, the amount paid, attempts made to collect will all be needed. You need to really be able to show that the amount is not collectible.
You would report this in the investments section, please see below for more detail
You have what is called a "Non-business Bad Debt" and yes, it can be deducted if it not collectible.
You will need to show the amount that was owed to you, for example, $1,500 and let us say $600 paid, then you had $900 coming and this was not paid. Your loss in my example is this $900, which would be the Short-term capital loss.
Documentation. The art gallery detail on the consignment, the price agreed to, the amount paid, attempts made to collect will all be needed. You need to really be able to show that the amount is not collectible.
You would report this in the investments section, please see below for more detail