How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask MequonCPA Your Own Question
MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
Type Your Tax Question Here...
MequonCPA is online now
A new question is answered every 9 seconds

What tax write-offs (losses) are available in the discounted

This answer was rated:

What tax write-offs (losses) are available in the discounted sale/purchase Ch 11 bankruptcy claims? (Florida)
Ed Young [email protected]



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 and other Tax Specialists are ready to help you
Customer: replied 6 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?



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.

Related Tax Questions