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dwanet65
New Member

I sent the northwest territorial mint $9000 to purchase 540 silver dollars. they accepted my check and shortly filed for bankrupsy. may I claim a loss on my tax?

 
5 Replies
fanfare
Level 15

I sent the northwest territorial mint $9000 to purchase 540 silver dollars. they accepted my check and shortly filed for bankrupsy. may I claim a loss on my tax?


How to report bad debts.(p111)
Deduct nonbusiness bad debts as short-term capital losses on Form 8949.
Make sure you report your bad debt(s) (and any other short-term transactions for which you didn’t receive a Form 1099-B) on Form 8949, Part I, with box C checked.
For more information on Form 8949 and Schedule D (Form 1040), seeReporting Capital Gains and Losses in chapter 16. See also Schedule D (Form 1040), Form 8949, and their separate instructions.
For each bad debt, attach a statement to your return that contains:
  • A description of the debt, including the amount, and the date it became due;
  • The name of the debtor, and any business or family relationship between you and the debtor;
  • The efforts you made to collect the debt; and
  • Why you decided the debt was worthless. For example, you could show that the borrower has declared bankruptcy, or that legal action to collect would probably not result in payment of any part of the debt.
Marketstar
Level 7

I sent the northwest territorial mint $9000 to purchase 540 silver dollars. they accepted my check and shortly filed for bankrupsy. may I claim a loss on my tax?

You may be able to claim the loss on your loan as a non-business bad debt.

However, to do so, the IRS requires that you take every reasonable measure to recover the debt.

See Nonbusiness Bad Debt for definition and requirements for deduction.

A nonbusiness bad debt is reported as a short-term capital loss, subject to the $3,000 limit per year, the remaining amount is carried forward to future years until the loss is consumed.

To enter a non business bad debt:

  • Type in nonbusiness bad debt in the search box, top right of your screen

  • Hit the Enter key

  • Click jump to nonbusiness bad debt in the search results

  • Follow the prompts and online instructions


fanfare
Level 15

I sent the northwest territorial mint $9000 to purchase 540 silver dollars. they accepted my check and shortly filed for bankrupsy. may I claim a loss on my tax?

I'd report this as a capital loss. 

Coins (worthless)  Costorotherbasis $9000, proceeds zero.

fanfare
Level 15

I sent the northwest territorial mint $9000 to purchase 540 silver dollars. they accepted my check and shortly filed for bankrupsy. may I claim a loss on my tax?

From their website:
April 13, 2016
If you placed your order with the company prior to April 1st 2016 and your check was negotiated (cashed) then you are a creditor of the Northwest Territorial Mint bankruptcy. If your order check was not negotiated (cashed) prior to that date your check will be returned to you in the near future. If your order was placed on or after April 1st your order will be filled in the regular course of business or we will return your check to you if the specific items are not currently available. Thank you for your understanding and your business.

The bankruptcy process can be confusing and frustrating for creditors. Thus in an effort to keep you informed of our progress, major events in the bankruptcy and the possible recovery we will from time to time be providing additional information to our website. The information will relate to the progress in the case, court dates and other relevant information to this case.

I, Mark Calvert, was appointed as Trustee on April 11th at 9 am. I am in the process of getting up to speed on the current situation. My intent is to have an initial creditors meeting on May 11th in the afternoon. At this meeting I will provide my initial findings, anticipated timelines and estimated recovery for the customers. I would appreciate your patience until May 11th so I can focus on completing my initial assessment and distribute the information to all creditors. My initial report will also be posted on this website in a downloadable format for your review.

I apologize for the burden this has placed on you and your family. I will do my best to maximize your recovery within a reasonable timeframe. If you are unable to wait until May 11th, please feel free to send me an email at <a rel="nofollow" target="_blank" href="mailto:Mark.Calvert@NWTMint.com">Mark.Calvert@NWTMint.com</a>. Once a week I will make an attempt to respond to all emails.
fanfare
Level 15

I sent the northwest territorial mint $9000 to purchase 540 silver dollars. they accepted my check and shortly filed for bankrupsy. may I claim a loss on my tax?

"Total filed claims are in excess of $70 million and the recovery will be limited such that creditors should not expect a high percentage of recovery on their claims. If the tight cash flow issues cannot be resolved, the Trustee will need to close the business and liquidate the assets on terms that will provide very little return to creditors."
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