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Jax Tax
Jax Tax, Tax Attorney
Category: Tax
Satisfied Customers: 1408
Experience:  JD, LL.M in Business and Taxation, IRS Enrolled Agent. Expert in Business and Tax Transactions
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I made a loan to a small business a couple of years ago. Very

Customer Question

I made a loan to a small business a couple of years ago. Very few payments have been made. I am wondering if I can write off any of the debt if I consider it a bad debt. The loan was in excess of $200K.
Submitted: 5 years ago.
Category: Tax
Expert:  Jax Tax replied 5 years ago.

Jax Tax : If you make a loan that is ultimately not paid, yes you can right it off as a capital loss on sch D.
Jax Tax : To take the loss, it must be clear that it will not be paid. You should deduct it in the year you realize that it has gone belly up.
Jax Tax : So to summarize, yes. It is reported on schedule D.