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Old 10-12-2012, 03:21 PM
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Can I claim unpaid money that daughter did not contribute while living with us?

My daughter and her 3 children moved in with us last year. We were able to claim the children on our taxes last year. When the new year started she had just started to work and was suppose to give us $400.00 a month to help pay for the utilities and grocery expenses. She never gave us a dime and moved out at the end of May with her children. She has made no attempt to give us any money for the time she was here and unfortuneately it has caused a big finacial burden on us. We maxed out our credit cards and are now trying to get back on track. We have asked her for money but being a single mother of 3 and trying to make it on her own we know we will never see any of the money. Can this be claimed as a capitol loss? as we have with bad personal loans.



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Old 10-13-2012, 06:06 AM
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“Can this be claimed as a capitol loss?”---->I don’t think so; capital loss is loss on the sale of an investment asset, such as stocks, bonds, or mutual funds. A loss is incurred if you sell the investments for less than what you paid for it.
“as we have with bad personal loans.”----> To be a bona fide debt, there has to be a debtor-creditor relationship between you and your daughter, and there has to be a valid and enforceable obligation for repayment. The main idea here is to show that, when you made the loan, you intended and expected to be repaid. So, if you lend money to a daughter and there's no understanding between you that it must be repaid, you've made a gift, and you can't take a deduction for a gift. An oral agreement may do the job, but something in writing is better. A simple loan document showing who's borrowing the money and how much, and when and how it's to be repaid will usually be enough to show a bona fide debt.



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