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Your father can indeed claim it as a loss and treat it as an early gift or inheritance on his taxes, that is correct. Even if the debt was unclaimed, the father can claim it as a gift (if he chooses to do so). That does not affect the bankruptcy petition, but would allow your father to treat it as an early distribution and then modify future inheritance splits to more accurately recognize that this amount of money was essentially already paid out in the past. Legally that is not a violation based on the amount so written off.
Hope that clarifies.
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