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Question

Can I deduct a Judgment owed post divorce process? Principal plus interest total $1 million dollars. This money has been uncollectable.

Forum|Forum|3 months ago
April 7, 2026
1 reply
54 views

Can I deduct a Judgment owed post divorce process? Principal plus interest total $1 million dollars. This money has been uncollectable. This money is owed to me as equitable distribution plus penalty interest.

TurboTax Online

Level 15

No. You can’t claim an uncollectible divorce judgment as a tax loss. To deduct a loss, you usually need to have “basis” in the money—meaning it was your own after taxes or money you paid out. In a divorce, the court divides up property you already own together. The IRS treats this as a split of assets, not as a loan or a taxable event.

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