USA Tax treatment of bad debt.

Mar 23, 2013
Reaction score
If a business buys a judgment in an effort to collect it which is later deemed noncollectable, I understand this is business bad debt.

I am trying to understand the tax treatment of collecting the judgement for the following cases
Buy for <face, collect face
Buy for X, collect <X

Perhaps related to this, what is my basis in the above 3 cases as well.

Any nuance as to the structure of the business (LLC, Sole Prop, C-corp, etc.)

Any reference are appreciated as well.


Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads

USA Debt Prepayment Cost Treatment 1
Tax treatment of business bad debt 0
USA Bad Debt Expense & Cash Basis P&L 4
Tax treatment of Passover "sales"? 24
Bad Debt 0
Bad debt 6
Is this a Bad Debt? 2
UK Bad debts 1