Carry forward bad debt

Maybe.  If someone owes you money you cannot collect, you have a bad debt.  Goods and services that customers have not paid for are shown in your books as either accounts or notes receivable.  If you are unable to collect any part of these accounts or notes receivable, the uncollectible part is a business bad debt.

You can take a business bad debt deduction for these uncollectible amounts only if the amount you were owed was included in your gross income either for the year the deduction is claimed or for a prior year.

When you take the business bad debt deduction, you would reduce the accounts or notes receivable in a like amount.

The business bad debt deduction would be reported on Schedule C for Sole Proprietorship or  your applicable business income tax return.