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DIY Products

Whether you’re an experienced do-it-yourselfer or doing your own taxes for the first time, this is your place to learn and share. Here you’ll find information and resources for using H&R Block’s online and software DIY solutions. You’ll also find links to more information to assist you on your DIY journey.

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Trusted Pioneer
Posts: 6
Registered: ‎03-13-2017

How To Enter Nonbusiness Bad Debt/Short Term Capital Loss into Tax Software?

Currently using HR Block 2016 Deluxe tax software.

 

I gave a loan last year to a startup business that failed.  There is no way for the business to repay the loan to me.  I've researched that this should be considered a nonbusiness bad debt and considered a short-term capital loss.  It meets all of the criteria (challenge benchmarks).

 

My question is: where in the HR Block Deluxe tax program can I enter that information?  Is it possible to take this deduction by using the HR Block tax software?  My initial research indicates it may be either on Schedule D or Form 8949. but I cannot pinpoint where in the interview I could enter this information.

 

Thank you much.

 

RM

Associate (Neighbor)
Posts: 332
Registered: ‎04-03-2013

Re: How To Enter Nonbusiness Bad Debt/Short Term Capital Loss into Tax Software?

Topic 453 - Bad Debt Deduction

If someone owes you money that you can't collect, you may have a bad debt. For a discussion of what constitutes a valid debt, refer to Publication 550, Investment Income and Expenses, and Publication 535, Business Expenses. Generally, to deduct a bad debt, you must have previously included the amount in your income or loaned out your cash.

 

This would generally be used by tax returns filing on the accrual accounting method whereas almost all individuals file with the cash accounting method.

 

Regards,

Caleb

Trusted Pioneer
Posts: 6
Registered: ‎03-13-2017

Re: How To Enter Nonbusiness Bad Debt/Short Term Capital Loss into Tax Software?

I have already determined that someone owes me a "bad debt". It is a nonbusiness bad debt, under short-term capital gain/loss. The cash was loaned out and cannot be repayed.  I can take a $3000 per year deduction.

 

My question was can I enter that information on the HR Block Deluxe 2016 software?  If so, where in the program?

Tax Pro
Posts: 1,422
Registered: ‎09-04-2014

Re: How To Enter Nonbusiness Bad Debt/Short Term Capital Loss into Tax Software?

8849/sch. D

BettyB
Sr. Tax Analyst
Trusted Pioneer
Posts: 6
Registered: ‎03-13-2017

Re: How To Enter Nonbusiness Bad Debt/Short Term Capital Loss into Tax Software?

Do you mean 8949 Schedule D?

 

I may have solved it. I used the "Capital Gains and Losses Worksheet" in the Forms Central part of the program.  It seems to have filled out the appropriate boxes in 8949 and Schedule D.

 

Does this appear to everyone that I'm on the right path?


RM

Pioneer
Posts: 2
Registered: ‎04-16-2014

Re: How To Enter Nonbusiness Bad Debt/Short Term Capital Loss into Tax Software?

[ Edited ]

Same question for me. I know I have a non business bad debt and need to file form 8949 and Schedule D and I am using the H&R Block Online Premium. I cannot seem to find the correct Interview questions.

 

Where could I fill out these forms? Thank you.

 

I have followed the Help Center's suggestion to do this:

"Use Forms 1099-B and 1099-S to enter this information here:

  1. Click Federal on the top navigation.
  2. Click Income and choose Investments.
  3. Click Visit Topic next to 1099-B, 1099-S Sale of stocks, bonds, mutual funds, and other investment property."

However, under the "Disposition Type", even though the explanation under "Learn More" showed the Non Business Bad Debt option, there is actually no such option in the selection box. What do I do?

Member
Posts: 1
Registered: ‎04-18-2017

Re: How To Enter Nonbusiness Bad Debt/Short Term Capital Loss into Tax Software?

I'm not sure if this is right, chatting with support now, but I found the non-business bad debts drop down by clicking on "I do not have a 1099-B." It took me to "1099-S Sale of other real estate, collectibles, and other investment property."

Here, I non-business bad debts was in the drop-down.