Your client, Winnie Bay Gogh, just received a disturbing notification in the mail. Winnie loaned a coworker $20,000 two years ago. Her friend was starting a new business and needed some cash to get it going. The business did not go well and Winnie received notification from the bankruptcy court that her friend had filed for bankruptcy. The bankruptcy was official as of September 2, 2022. Consequently, Winnie will not be able to collect any of the debt. She is wondering if there is any way she can deduct the $20,000 on her tax return. After all...the money was loaned to help with a business...so, maybe it's a "business bad debt"?? If she can deduct the loss, what type of loss will it be (ordinary or capital) and how will that classification impact her taxes. Also, she needs to know if she would have to file an amended return for the year she lent the money or if it would be deducted on the current year return. Yugghh...so many questions! Winnie is quite distraught