Dana Pehrson advanced $93,000 to her nephew in 2008 to enable him to attend a private university. Over the next few years. the nephew repays Dana $16,000 on the loan. However, seven years later Dana comes to you to determine whether she can claim a bad debt deduction for the $77,000 the nephew has not repaid. What planning tips might you give to Dana? What mistakes were made?

Answer rating: 100% (QA)

Bad Debts For tax purposes you have a bad debt when youre owed money and you cant collect it There are two kinds of bad debts business and non business You have a business bad debt when its related to ... View the full answer