Loaned money to a friend

[kathiwi]

lent money to a co-worker, he did not pay me back. He passed away in a car crash on 12/16/2016. Can I deduct this?

[MichaelL1]

This a personal (nonbusiness) bad debt.  It can be deducted on your tax return.

It is entered in the Investments section.  It is listed under "Other" assets sold as it will be shown as a short term capital loss.

The sale price is shown at $0, the sales date is date it became worthless.

The purchase price or cost is the amount owed to you and the date of the debt.

To enter your Nonbusiness Bad Debt

Click on Federal Taxes

Click on Wages and Income

Click on I'll choose what I work on

Scroll down to Investments

On Stocks, Bonds, Other, click the start or update button

Enter it here. 

You will need some evidence of this debt for your tax records so I recommend you look at the below link. 

See this link for detail 

https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Deductions-and-Credits/How-to-Report-Non-Business...