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Businessprofile
Returning Member

Bad Debt Write-Off

 
2 Replies
macuser_22
Level 15

Bad Debt Write-Off

The personal bad debt deduction was eliminated for the tax years 2018-2025.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Carl
Level 15

Bad Debt Write-Off

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.

 

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