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MequonCPA
MequonCPA, Certified Public Accountant (CPA)
Category: Tax
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Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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What tax write-offs (losses) are available in the discounted

Resolved Question:

What tax write-offs (losses) are available in the discounted sale/purchase Ch 11 bankruptcy claims? (Florida)
Thanks.
Ed Young XXX@XXXXXX.XXX
Submitted: 4 years ago.
Category: Tax
Expert:  MequonCPA replied 4 years ago.

DearCustomer-

 

Most of the creditors will obtain their losses at the time of the bankruptcy filing. Business bad debts can be written down to expected net realizable value. They do not have to wait until the debt is totally worthless which is required for nonbusiness bad debts.

 

 

MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2327
Experience: CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
MequonCPA and 2 other Tax Specialists are ready to help you
Customer: replied 4 years ago.

Thanks for the answer back. Just one more question.

(A repeat from comments)

If someone buys a bankruptcy claim (at a discount) and ultimately realizes less than its face value, can they too claim a loss?

Expert:  MequonCPA replied 4 years ago.

DearCustomer-

 

The purchaser may be entitled to a loss if they receive less than they paid for the note. If they purchase a $1,000 note for $200 and receive only $75 they will have a $125 loss. If they receive more than $200 they will have a gain.

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