Courtesy of Guest Blogger, Stanley J. Bushner, Shareholder, Buckno Lisicky & Company CPA's
CLICK HERE to learn more about Buckno, Lisicky & Company CPA'sThere are two kinds of bad debts business and non-business (personal). There is a big (tax) difference between business and non-business bad debts. A business bad debt is an ordinary deduction and therefore can be offset against ordinary income. A non-business bad debt is a short-term capital loss thus limited to $3,000 a year against other income, after offsetting capital gains.