January 23rd, 2016
TAX TIP OF THE DAY... deduct loans to friends
Did you loan money to a person who never paid you back? A BAD DEBT DEDUCTION is available for the tax year that the debt is determined to be uncollectible. Requirements: 1) You needed to attempt to recover the repayment, otherwise the situation is a non-deductible gift. 2) There needs to be a reason established for the conclusion that the unpaid debt is uncollectible... such as bankruptcy, death, debtor hardship or attorney advising that collecton costs would exceed the unpaid amount.
SHARE WITH A FRIEND.
If you need tax help... www.baboiancpa.com
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David S. Baboian, CPA