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August 2009
Lau, Soltis and Stapleton "Tackling Bad Debt Losses" Article Published in Taxes—The Tax Magazine
While bad debt losses are common, especially during the current economic downturn, the income tax treatments of such losses are unclear and complex. When determining whether a debt loss should be treated as an ordinary deduction or a capital loss, the first question to ask is whether the debt is an ordinary asset or a capital asset. This is generally determined based on the definition set forth in Internal Revenue Code Sec. 1221. If the debt is an ordinary asset, the loss is ordinary. If the debt is a capital asset, the answer is much more complex.
Blackman Kallick partners Paul Lau, Sandy Soltis and Nora Stapleton have co-authored “Tackling Bad Debt Losses,” which was published in the August 2009 issue of Taxes—The Tax Magazine. The article is the first in a series of articles that will appear under a column titled “Tackling Taxes” in Taxes—The Tax Magazine.
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