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You would claim the loss one time in the year that the debt becomes worthless and treat as a short-term capital loss.
To deduct in TurboTax, type 'bad debt, non business' in the Find box of your program, then select the 'jump to' link. On the landing page, select 'Yes' then 'No' to the 1099-B question. Select 'Uncollectible Debt on the next page.
See also IRS and TurboTaxHelenaC's answer below.
https://www.irs.gov/taxtopics/tc453
You would claim the loss one time in the year that the debt becomes worthless and treat as a short-term capital loss.
To deduct in TurboTax, type 'bad debt, non business' in the Find box of your program, then select the 'jump to' link. On the landing page, select 'Yes' then 'No' to the 1099-B question. Select 'Uncollectible Debt on the next page.
See also IRS and TurboTaxHelenaC's answer below.
https://www.irs.gov/taxtopics/tc453
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