Harlan Lunsford <lunstax[at]belllsouth.net> wrote:
- quote -

That makes lots of sense to me.

But seeing that's true, it must be wrong. ;-)

Stu

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"Herb Smith" <smithff33[at]aol.com> wrote:

- quote -

Even the IRS has done that. I remember seeing one case in
which the IRS blew the statute of limitation in an attempt
to collect a rather large tax bill. So for the year in
which the statute expired, they determined that the amount
of unpaid tax was taxable income. So they got a good chunk
of it anyway.

Stu

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"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

As a short term cap loss only.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Stuart A. Bronstein wrote:
- quote -

Sounds like a non-business bad debt to me.

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Stuart A. Bronstein wrote:
- quote -

I'm thinking that loans to employees, being in a business
setting would not be personal in nature, esp if employer
were other than a proprietorship.

ChEAr$,
Harlan Lunsford, EA n LA

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Stuart A. Bronstein wrote:
- quote -

Yes, they are. NON-BUSINESS Bad Debts are claimed as
short-term capital losses on your Schedule D. Of course, you
still have to have evidence that a valid debt existed
(signed promissory note with repayment detail) and efforts
to collect the debt - including suing in small claims court.
Issuing a 1099 to the debtor is not usually an option for a
non-business bad debt, but is perfectly acceptable for a
business. If they won't pay back the loan, make 'em hurt a
little by having to pay the taxes on that "income"!

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Stuart A. Bronstein wrote:

- quote -

Yes. It would appear to be an exception to the general
concept that "personal" expenses are not deductible.
Naturally, write-offs based on loans to friends or family
members might be closely scrutinized to see if "gift"
motives were involved, etc.

MTW

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Stuart A. Bronstein wrote:
- quote -

Sounded to me as loans or advances to employees. Employee
left without repaying? To repeat myself, issue a 1099. The
employer gets to write it off in whole and the erstwhile
employee gets to pay the taxes on it.

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R <cma_cpa[at]hotmail.com> wrote:

- quote -

So bad debts based on personal loans are deductible?

Stu

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SteveW" <swardlowSPAM[at]swbell.net> wrote:

- quote -

To be deductible as Bad Debt Expense, the IRS requires that
you make a substantial effort to collect the debt before
it's written off, such as turning the debt over to a
collection agency or suing the debtor. This reasoning is
unstandable because if it was as easy as making a journal
entry, then everyone would be giving money to friends and
family, then writing it off as bad debt.

Hope this helps,
Russell Tuncap, CMA, CPA
www.tuncap.com

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SteveW" <swardlowSPAM[at]swbell.net> wrote:

- quote -

Write them off by issuing these employees 1099's.

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Our company has some advances to (former) employees
receivables that we feel are not collectable. What kind of
documentation will we need to deduct these items? Im
thinking we will have to have a signed evidence of the debt,
and documentation of our attempt to collect them. Is there
any other things I might need?

Thanks

Steve

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