IntroductionIf someone owes you money you cannot collect you have a bad debt.There are two kinds of bad debts--business bad debts andnonbusiness bad debts. hotel rooms ParisGenerally, a business bad debt is one that comes from operatingyour trade or business. You can deduct business bad debts as anexpense on your business tax return. All other bad debts are nonbusiness bad debts and deductible asshort-term capital losses on Schedule D (Form 1040). For moreinformation on nonbusiness bad debts, see Publication 550,Investment Income and Expenses. |