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Your client loaned someone $10,000 in 2017. The loan had a contract, a set payment schedule, and a set interest rate. In 2022 the loan
Your client loaned someone $10,000 in 2017. The loan had a contract, a set payment schedule, and a set interest rate. In 2022 the loan had an outstanding balance of $1,500. The loan was listed in a bankruptcy and forgiven. There can be no further collection attempts to obtain the remaining amount. What can your client list on their tax return in 2022?
$1,500 short-term capital loss
$1,500 long-term capital loss
$1,500 ordinary loss
Nothing, no loss is allowed
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