Received Notice of Insolvency from debtors estate today
I entered into a promissory note with a real estate developer 15 years ago with a basis of $150,000. The note stated a 10% interest per year. Approximately 7 years ago he passed away. At that time, the promissory note had acrued $64,320 in interest. Today I received the Representation of Insolvency from his estate, as approved by probate. My promissory note is receiving $0.00 in payment. (A total write off.) When entering this loss on my taxes on IRS Form 8949, can I deduct as a loss: $150,000 or $214,320? Is the unpaid interest deductible as a loss? Thank you!
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