Tax treatment of loser note?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Topic Author
LeeMKE
Posts: 1884
Joined: Mon Oct 14, 2013 9:40 pm

Tax treatment of loser note?

Post by LeeMKE » Mon Feb 11, 2019 11:20 pm

Last year DH sold a hunk of business stuff on a personal note. It was not reported as an installment sale because it was a loss, sold below cost. I reported it, but on the tax return, the sale was presumed to be fully paid, when in fact payments would be due for at least another year.
Well, now the guy has slowed down his payments and I'm sure he'll bail completely by the end of the year.
How should I deal with this on our next tax return?
I'm finding confirmation that I reported the sale correctly because it was a loss, but nothing about what to do about the additional loss.
No wonder I handle all the retirement finances. :annoyed
The mightiest Oak is just a nut who stayed the course.

Topic Author
LeeMKE
Posts: 1884
Joined: Mon Oct 14, 2013 9:40 pm

Re: Tax treatment of loser note?

Post by LeeMKE » Mon Feb 11, 2019 11:54 pm

Found it:

IRS 550:
Nonbusiness bad debt
I will report a short term loss on form 8949

Found it on Intuit's TurboTax Q&A website, answering the same situation for another person.
The mightiest Oak is just a nut who stayed the course.

RudyS
Posts: 1602
Joined: Tue Oct 27, 2015 10:11 am

Re: Tax treatment of loser note?

Post by RudyS » Tue Feb 12, 2019 9:33 am

LeeMKE wrote:
Mon Feb 11, 2019 11:54 pm
Found it:

IRS 550:
Nonbusiness bad debt
I will report a short term loss on form 8949

Found it on Intuit's TurboTax Q&A website, answering the same situation for another person.
Nice work, and thank you for letting us all know.

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