Question

Bad Debits

Forum|Forum|1 year ago
February 24, 2025
1 reply
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I had my home damaged due to faulty workmanship by a plumber. I sued won the case, but of course cannot collect. Can I show the awarded settlement as a Bad Debt on my 2025 taxes?

V

Vanessa A

No. In order to claim a bad debt, you would have had to previously claim the amount of income given/lent/owed in your income.

Also, in order to claim a debt as a bad debt, it must be completely worthless and you must have gone through all measures you can to collect on the debt.

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