Loss on Business Loan

Forum|Forum|3 years ago
June 1, 2023
3 replies
42 views

A client loaned 21,500 to a person who setup a bar with it and the bar ended up closing and he was never paid back. He got a letter from the partener saying that the loss on the loan is acknowledged.

How is this entered in ProSeries? It would be considered a passive loss if the client was not involved in the business and just lent money to open it.

ProSeries Professional

This topic has been closed for replies.

Just-Lisa-Now-

Intuit Community Champion

Are they going to take this person to court to recoup their money?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

T

thetaxdoctor1Author

Level 3

No, we are taking it is a loss on their tax return. I am able to take the whole loss and put it on a 4797 for him for now but I wanted to check if there were other alternatives

sjrcpa

Level 15

Is your client in the business of making loans?

Assuming no, a nonbusiness bad debt is a short term capital loss.

The more I know the more I don’t know.

BobKamman

Level 15

First sentence, he's a lender. Second sentence, he's a partner. Was there a written agreement setting forth the exact relationship? And by the way, how are they related? Sounds like a brother-in-law deal to me.

sjrcpa

Level 15

I missed the partner part.

The more I know the more I don’t know.

BobKamman

Level 15

As I was saying, was there a written agreement?

sjrcpa

Level 15

What does "his business partner" mean?

If nonbusiness bad debt is the correct answer, then yes the unused loss carried forward.

The more I know the more I don’t know.

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