When is a bad debt tax deductible?
- December 12, 2014
- David Greene
- Comments Off on When is a bad debt tax deductible?
You can claim a theft loss as a deduction only if there is no chance of recovering any of the amount stolen. The IRS looks at the possibility that the debtor will eventually pay the debt or, in the case of stealing and criminal prosecution of the debtor, he will have to pay restitution as part of his punishment. You can claim the theft loss at any time after there is no possibility of the debtor repaying any part of the money you lost.