allfiredup
Member
All parties involved live in Georgia.
Back in 2009, my mom and step-dad tried to help my sister by selling her my mother's vehicle (a 2003 Ford Explorer) for about 75% of the vehicle's value AND allowing her to make payments until she had paid for the purchase in full. The price of the vehicle was $8000 and she agreed to pay monthly payments of $250. She paid two installments, then asked for a 'few months' off due to her husband's reduced income and work situation. She never paid another cent on the vehicle.
My mother routinely mentioned the outstanding loan balance to my sister, but it only caused heated arguments and hard feelings. In 2012, my grandmother (biological father's mother) died and my sister and I each inherited $28k in cash and over $200k each in real estate. My sister promised my mom and step-dad that she would pay them the $7500 balance owed in full when she received her inheritance check. She got the check, but never paid a cent of the $7500.
Last year (2013), my mom finally gave up and accepted that my sister was never going to pay what she owed. I recommended that they go ahead and sign over the title to my sister for liability reasons (I'm their insurance agent) and to provide some emotional closure also. She signed over the title and registration to my sister on 12/15/2013. My sister confirmed that she had no means or intention of paying back any of the unpaid $7500.
Can my parents consider the $7500 as a non-business bad debt for the purpose of deducting on their 2013 Income Tax Return?
Back in 2009, my mom and step-dad tried to help my sister by selling her my mother's vehicle (a 2003 Ford Explorer) for about 75% of the vehicle's value AND allowing her to make payments until she had paid for the purchase in full. The price of the vehicle was $8000 and she agreed to pay monthly payments of $250. She paid two installments, then asked for a 'few months' off due to her husband's reduced income and work situation. She never paid another cent on the vehicle.
My mother routinely mentioned the outstanding loan balance to my sister, but it only caused heated arguments and hard feelings. In 2012, my grandmother (biological father's mother) died and my sister and I each inherited $28k in cash and over $200k each in real estate. My sister promised my mom and step-dad that she would pay them the $7500 balance owed in full when she received her inheritance check. She got the check, but never paid a cent of the $7500.
Last year (2013), my mom finally gave up and accepted that my sister was never going to pay what she owed. I recommended that they go ahead and sign over the title to my sister for liability reasons (I'm their insurance agent) and to provide some emotional closure also. She signed over the title and registration to my sister on 12/15/2013. My sister confirmed that she had no means or intention of paying back any of the unpaid $7500.
Can my parents consider the $7500 as a non-business bad debt for the purpose of deducting on their 2013 Income Tax Return?
