Quote:
Originally Posted by JCK
According to IRS, they do not allow one to write off bad debts if they were not previously recorded as income. So for those doing accounting on a cash vs accural basis, you record income when you actually get it and since we never got it, well ...
http://www.irs.gov/taxtopics/tc453.html |
"To deduct a bad debt, you must have previously included the amount in your income or loaned out your cash"
I am including this in my income and I can write this off as a bad debt.
also,
"If you are a cash basis taxpayer, as most individuals are, you may not take a bad debt deduction for money you expected to receive but did not"
I did receive the money in epass(screenshot) which counts as income that I report.