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Can a taxpayer claim the non business bad debt for being scammed by a contractor that never completed job in home? He never returned and homeowner paid him > $17,000

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Level 1
 
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Level 12

It's not bad debt; it's personal theft loss and this is not deductible. See the IRS resources, such as:

https://www.irs.gov/taxtopics/tc515

 

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Level 15

File a claim with your state contractors licensing agency. File at least in small claims court to establish a valid debt, then maybe you can claim a casualty loss due to theft. 


ex-AllStar