I made two failed loans to XXX LLC.
The first loan was on 12/26/2017 for $75,000 to the XXX LLC to be paid back on 1/1/2023 with interest $186,000. The second loan was on 2/25/2019 for $25,001 to the XXX LLC to be paid back on 3/27/2024 for $62,000. When the first loan came due and no re-payment was made - I followed up with the XXX LLC and tried to work a resolution. When the second one came due - I knew there was a major problem. At no time was the loan for any equity. Other lenders also were stiffed by XXX LLC. (I decided against a lawsuit as it would have been costly and lengthy.)
It was not until December 2024, that I finally realized that the XXX LLC was not going to pay. I have a detailed communication trail with the XXX LLC and sole proprietor. I was also then given the Voluntary Dissolution form that stated XXX LLC was dissolved on 7/20/2022.
The issue becomes - how do I take these losses off on my income tax return and for what year do I declare the loss? I think it should be a 8949 form as a Part 2 (F) Long-term transactions not reported to you on Form 1099-B.
As for the year - federal government states that loss should be taken in the year that it is deemed worthless. I did not think it was worthless until 2024 when a resolution could not be met with XXX LLC and the sole proprietor. However, the Voluntary Dissolution that was filed and accepted by the state was dated 7/20/2022.
How do I approach this sticky tax situation?
