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Reload this Page right to claim bad debt

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Old 03-14-2007, 11:33 AM
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right to claim bad debt

What is the name of your state? Iowa

When my former employer went bankrupt it left me with $21,000 worth of unpaid wages, benefits and retirement. Does anyone know the tax law in regards to worthless or uncollectable debt. A right to claim was filed with bankruptcy court and no results will be awarded. I am looking specifically at line 27 on 1040 itemized deductions. Any help would be most appreciated.
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Old 03-14-2007, 11:53 AM
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Info:

[url]http://www.irs.gov/pub/irs-pdf/p535.pdf[/url]
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Old 03-14-2007, 09:04 PM
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Apparently you mean Line 27 of schedule A (misc. deductions) not 1040 (self-employment tax). IRS Pub 529 explains misc. deductions [url]http://www.irs.gov/pub/irs-pdf/p529.pdf[/url]

Itemized deductions in general are for things paid from normally taxable income. But income never received should not be included as income, is not taxable, and therefore, not deductable. It would be a different matter if you loaned the company after tax money and did not get it back. So the only thing that may be deductable is if you paid for related business expenses that you were not reimbursed for.

Unfortunately bankruptcy comes out of the pockets of others like you that do not deserve paying for it.
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