You have nothing to claim here. This is not a bad debt.
If you were never paid the money, then you never reported the income to the IRS and therefore you never paid taxes on it. You can't deduct from your taxable income that which you never received and never paid taxes on in the first place.
A bad dept would be something like If I am a car dealer and sold you a car for $12,000 that I had paid $6,000 for. If you never paid me for the car and stole it and it was never recovered or was totaled in an accident under your illegal possession of that car, then I've lost the $6000 I paid for that car originally. That would be bad debt.
Sign In
