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 PDtax Your Own Question
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4093
Experience:  35 years tax experience, including four years at a Big 4 firm.
64119565
Type Your Tax Question Here...
PDtax is online now
A new question is answered every 9 seconds

I am acquainted with someone who, over the last few years,

Customer Question

I am acquainted with someone who, over the last few years, has "borrowed" sizeable amounts of money from several people. These loans were made without benefit of written agreements. It has become quite obvious that this person has no intention of paying any of this money back. At any time could this money be considered income and therefor taxable?
Submitted: 1 year ago.
Category: Tax
Expert:  PDtax replied 1 year ago.

Hi from Just Answer. I'm PDtax, and can assist.

The tax rules for deducting nonbusiness bad debts govern these transactions, and the lack of written agreements will be a major drawback to claiming the loss (if you are a lender).

Expert:  PDtax replied 1 year ago.

If you were the borrower, they will have the common argument that the monies were gifts, and therefore not taxable. The lack of loan evidence in fact supports this position.

Customer: replied 1 year ago.
Thanks. ***** was hoping for some way to get a little revenge by turning him in
Expert:  PDtax replied 1 year ago.

Positive feedback is appreciated. I'm PDtax.