Sub S adjusting basis in multiple assets due to insolvency

[annmci]

I loaned some $ to someone whose return I am preparing (a friend so not being paid).

They are never going to be able to pay me back and they are insolvent but they do have enough basis between 2 or 3 assets for basis to be reversed to $0.  

They are being depreciated as last quarter straight line.  I consider the cancelation to have occurred the end of the 2nd quarter of 25.

I'm not seeing how this can be done in QB.  I suppose worst case I can consider it to be the end of the year and just delete the asset and reinput in the 26 with $0 basis.

Any help would be greatly appreciated.

[Mike9241]

was the money lent to the shareholders who lent to the S-Corp, or directly to the S-Corp? 

[annmci]

Directly to the Sub S.

[Mike9241]

from an accounting standpoint, the debt would be debited, and the basis of the assets would be credited. 

[annmci]

Thanks for responding.  I get the accounting of it.  I am asking the TT of it.

I guess I can override the current year depreciation and change the basis to equal current and prior year depreciation to have $0 ending depreciable basis?  I try to avoid overriding whenever possible.

I am hoping not to have to paper file.

[annmci]

Mike9241, thanks for responding and I apologize.  I just noticed today I put QB when I meant TT.

Do you know how it should be handled in TT?  TYIA.