Bad business debt owed - do I declare the retail or wholesale?

[2017jkw]

We were part of an antique mall that folded up - we were owed approximately $1560 by the owner and the place folded up and he declared bankruptcy.  I can prove this is what was owed by the antique mall's online software for vendors (which I screenshotted before he deleted the shop's account).   So basically we made $1560 in sales and he never paid us.  Do I declare the retail price of the debt ($1560) or what the wholesale cost of it was?  It seems wrong to declare the wholesale since we lost the opportunity to sell the items, and the actual sale price of the items is documented as a debt owed us by him...but I'm not quite sure this is right

[JosephS1]

No, you cannot take a deduction for the unpaid amount unless you used the "accrual" basis of accounting and previously reported the income on your return.  The bad debt is not a deductible item in and of itself; your deduction would be in the cost of the items sold at their cost amount.  If you did report the income previously, you would list it as a "bad debt" at the amount previously reported.

If you are able to reclaim any amount owed to you via the bankruptcy court or insurance, then you will claim that amount as income provided you did not report it as income previously.

@2017jkw 

[2017jkw]

Thank you for answering so quick!  I understand it now!