Question

I need to attach a statement to a Schedule C giving the details for Loans made to a client that are now Business Bad Debt. How?

Forum|Forum|7 years ago
June 5, 2019
2 replies
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According to IRS Publication 550, for each bad debt consumers need to attach a statement to the return that includes: A description of the debt, including the amount, and the date it became due; The name of the debtor, and any business or family relationship between you and the debtor; showing that the borrower has declared bankruptcy, Business bad debts include loans to clients, suppliers or business loan guarantees. These are taken as business losses and reported on Schedule C

TurboTax Self Employed Online

Critter

Employee

Turbo Tax will not allow attachments ... so to do so you will need to mail in the return.

L

Lattitude1

I incurred a loss in the sole proprietorship last year due to a loan that defaulted and the business declared bankruptcy. Is the Bad Loan Loss amount reported as a negative income in Part I on Schedule C? Do I report the total in one year or can I split is up in two or more years?