topic Re: Bad private debt in Get your taxes done using TurboTax

Bad private debt

Mash1 — Tue, 16 Mar 2021 20:52:57 GMT

Hi all, how do I enter bad private debt for the tax return 2020? I have seen several online discussions, but none works for my desktop Turbo Tax 2020. In detail, I have entered already one 1099-B from a bank under Investment Income. When I try to update the Investment Income, it only allows for "more sales", and does not give my another option, i.e. bad debt.

Thx

Re: Bad private debt

MarilynG1 — Tue, 16 Mar 2021 21:54:33 GMT

Personal bad debts are deductible as a short term capital loss on Form 8949 which transfers to Schedule D in your tax return.

Under 'Stocks, Mutual Funds, Bonds, Other', indicate 'no 1099-B' and 'Add a Sale'.

On the 'Sales Info' page, the Sales Proceeds are $0 (or any amount of the debt you did collect).

The Cost Basis is the total amount of the debt. Leave 'Holding Period' blank and check the box 'Allow me to continue with incomplete info'.

Continue to the Summary Page.

Click this link for more detailed info and instructions on Reporting a Bad Debt.

Re: Bad private debt

Mash1 — Thu, 18 Mar 2021 15:54:31 GMT

Thanks for your good response.

Just realized that there was a TurboTax update this morning 3/18/2021 and the non-business bad debt is now an option under Deductions and Credits - Other Deductions and Credits. The only disadvantage is, the text fields for statements are limited to one or two sentences only (circa 150 signs), just enough for a basic statement, not enough for a more complex statement. I would prefer at least a small paragraph, like 5 to10 lines or so. May be with the next update, TurboTax?