J lends $750,000 to B and it is a business debt. In 2020, B declares bankruptcy and J learns that other creditors in her situation will most likely receive 25 cents on the dollar for the loans outstanding. J does not receive any repayment until 2022, when she receives $150,000. 

How much may J deduct in 2021? 2022? 

Would the answers change if it was a non-business bad debt?

Answer rating: 100% (QA)

i If the debt is a business bad debt J may be able to deduct it as an ordinary loss on her tax retur... View the full answer