When to claim personal loan interest as income?
7 years ago I loaned a sum of money greater than $10k.
I received a promissory note, with 5% interest, and a 5-year repayment schedule.
No payments were never made, however after 7 years, I may be finally receiving a partial payment on the note.
When am I obligated to report interest income on this? If I do need to report a portion of it as interest income then how do I calculate what portion of the payment is interest, if there is no payment schedule being followed?
If the remaining loan principal is never paid in full, and this gets written off as bad debt, then in my estimation, I never earned any interest.