Can I deduct a losses from a personal loan??
I extended a loan tof $15,000 one of my friends last year for his business. Unfortunately, my friends business went bankrupt!
I was wondering can I at least write off these bad debts on my 2006 tax return? My friend is completely broke and has filed for bankruptcy..It appears that this loan is not collectible. Pretty soon he will be getting a judgement against him from a Bank, so I am last in line w/o any recourse.!
Also, if these losses are deductible, how does one go about claiming this losses and what proof or requirements do I need to submit to the IRS?