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| Bad debts | Business |
Introduction | |
| If someone owes you money you cannot collect, you have a bad debt. There are two kinds of bad debts—business and nonbusiness. This chapter covers business bad debts. | |
| Generally, a business bad debt is one that comes from operating your trade or business. You can deduct business bad debts on your business tax return. | |
| All other bad debts are nonbusiness bad debts and are deductible only as short-term capital losses on Schedule D (Form 1040). For more information on nonbusiness bad debts, see Publication 550. | |
Useful items | |
| Publication 525: Taxable and Nontaxable Income 536: Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 544: Sales and Other Dispositions of Assets 550: Investment Income and Expenses 556: Examination of Returns, Appeal Rights, and Claims for Refund | |
| See chapter 14 for information about getting publications and forms. | |
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