I am in the business of buying and selling businesses. I've done this for 25+ years now. I'll open a business from scratch then sell it. I did this with a business and, related to the transaction, I sold assets that I owned personally to the buyer of the business and I held a promissory note for which I filed a lien against those assets. I had accumulated the assets through the years and, because I live in the state of Maryland, there is no personal property tax on such assets. The value of the assets sold was $200K. The buyer paid $20K down which was reported as income in the year the payment was made. The buyer also made regular payments over the next 2yrs which was counted as income. Then, in the 3rd year, the buyer quit paying and also sold the equipment in spite of the lien. What the buyer didn't sell, he ruined. Except for assets valued at about $8K, the buyer either sold or destroyed all of the assets. I sent dozens of letters and, other than minimal payments (less than the late payment fees stipulated in the note), the buyer basically quit paying. He then sent me a proposal to do a "deed in lieu of foreclosure" in which he would pay $10K if I agreed to forgo legal action. By now, the buyer was living in his car and had no money. His ex-wife agreed to pay the $10K because she wanted to be completely free and clear of the buyer. I accepted the deal because I felt that it would be the only way to recover what remained of my assets or get any more money from the buyer. When I finally got to take back the remaining assets, they were worse than expected. Realistically, $10K was a generous valuation. Long story short, the buyer paid a total of around $40K before going into a tailspin. Taking back the $10K worth of assets meant that the only way I could truly assess the value would be to sell them for the highest offer. So, I tried but the highest offer I got was $2K. I kept the assets and put them in storage. My accountant is telling me this is not a business bad debt or a non-business bad debt. I don't understand how I can legitimately lose my property, not collect on the promissory note, and be prevented from claiming the loss? What am I missing?