Bad Debt Qualified Deduction?
Hello, I sold a business as owner financed which then went sideways after 6 months or so due to inactivity. The buyer admitted he was at fault, couldn't repay under any reasonable circumstance, and I received the business back. The business has clearly lost valuation, though still profitable. The remaining debt could be reasonably estimated at 80k after factoring their payments and the lowered business valuation upon return. All equipment/inventory was fully deducted long prior to the sale. I don't know if the entire remaining balance of the payment terms would be considered bad debt, or if only the months he did not pay prior to defaulting? Perhaps the lost valuation is considered bad debt? I think this situation is slightly uncommon, so I haven't been able figure this out on my own. Thank you
