Bad Debt - Partially Repaid

[boys of summer]

Shareholders  received formal notice 2 years ago that a loan previously provided to a small company would not be repaid.  Several attempts were made to recoup the loan to no avail.   Therefore, the individuals entered this in Schedule D as a non-business bad debt.  The insolvent organization has dissolved but just prior liquidated whatever minimal funds they had left and is now sending a tiny payment (0.1%) of the original loan.  How is this small amount payment accounted for on TurboTax Deluxe?  Is this accounted as income?   What documents are needed  (outside the cancelled check)?

[Mike9241]

something doesn't sound right. if a corporation made the loan, (the shareholders own the corporation) then it's the corporation that should have taken the write-off not the shareholders directly. If it resulted in the worthlessness of the corporation that made the loan. then the shareholders would take a deduction for a worthless security, not a bad debt.

my answer would be different if the shareholders personally loaned the money.

anyway, the recovery is taxable and reported on the same form where the loss was recorded