What bad debts can I deduct?
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ted
Apprentice
Joined: 05 Mar 2005
Posts: 5
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 Posted: 04/19/08 - 05:57 Post subject: |
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| I have recently got a new credit. It is the third one I have taken and the situation with my business has not improved a bit. My debt is worsening and I also have a bad debt. What bad debts can I deduct, if any? If anyone could help me with some advice, that would be great. Thanks in advance. |
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gus
Apprentice
Joined: 09 Jan 2007
Posts: 7
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| Posted: 05/18/08 - 23:52 Post subject: |
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| Any business is always a big risk. You simply never know what can go wrong, and sometimes things go against all odds and you suddenly find yourself in big trouble. Bad debts, as a debts someone has toward you, but you cannot collect, can also be problematic. You can deduct any bad debt, if you have already included that potential income in your return and thus had higher tax to pay. In that case, you have every right to get lowered tax since you never even got that money. If you have a non-business bad debt, it is not good for deducting. I hope you find the info helpful. Best of luck. For some more info, go to http://www.irs.gov/taxtopics/tc453.html. |
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