Can I claim bad debt on a personal loan the courts ordered my ex husband to pay?

Forum|Forum|1 year ago
February 13, 2025
2 replies
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My ex husband was court ordered to take over our $14,600 personal loan. He only paid $10,000. Can I claim the remaining $4,600 as bad debt?

RobertB4444

That is not a tax deductible expense, I am afraid. Personal loans never are.

@Audrey-deimel

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PSF Tax

Yes, you can. It's considered "non-business bad debt" and counts as a short-term capital loss. You can read about it on the IRS page here: https://www.irs.gov/taxtopics/tc453

In Turbo Tax, you can find where to enter the loss under Personal/Deductions/Uncommon Situations.

All the best to you in your next phase! And you're smart to ask if there's a way to write off this loss. Not sure why you got a different response in another reply.

CatinaT1

For clarification @Audrey-deimel, is this debt owed to you? I am understanding this is a personal loan your ex husband owes to someone. If so, there is nothing to deduct. The situation is different if this is money owed to you, but that doesn't appear to be the case.

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