turbotax icon
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Returning Member

Turbo Tax input of uncollectable Court Judgment

Contractor paid in full but job never finished.  In 2020 suit filed with $5,500 judgment in my favor but the contractor is now in prison for nonrelated issue.  His attorney advises he has no funds nor assets.  Can loss be claimed on 2020 taxes?

3 Replies
Expert Alumni

Turbo Tax input of uncollectable Court Judgment

On your 2020 tax return, you can deduct the amount you paid to the contractor for the unfinished job (if paid in 2020). But you cannot deduct the uncollected $5,500 judgment.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Turbo Tax input of uncollectable Court Judgment

Thank you MinhT1.  May I ask why IRS form 8949 may not be used to claim the loss of the funds?  I have reviewed IRS publication p550 on the Topic number 453 on a Bad Debt Deduction for Nonbusiness Bad Debts, and the instructions for the use of IRS form 8949 and specifically page 54 on Nonbusiness Bad Debts, and this appears to be the avenue to address the referenced loss. 

Turbo Tax input of uncollectable Court Judgment

In a follow up to my investigation of this issue I did a search on this platform on the question: 

Court Judgment Bad Debts, and I note the Best Answer posted by JulieR on a artist works sold by dealer and her reply that appears to reinforce my observation on if this loss of mine may be deducted and if so how to enter in Turbo Tax.  Again, thank you for your review and input.  

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
message box icon

Ready to start your taxes?

Hand off your taxes, get expert help, or do it yourself.

See Pricing
Manage cookies