How do I add Schedule D to amended 1040 return?

Jaynne1
Jaynne1 Member Posts: 2 Newcomer
in After you file

How do I add Schedule D to amended 1040 return?

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  • KristineS
    KristineS FreeTaxUSA Agent Posts: 177
    edited August 9

    Hi Jaynne1,

    To add Schedule D, follow this path once you've started the amended return.

    Select INCOME at the top > Stocks or Investments Sold (1099-B) > + Add an Investment Sale

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  • Jaynne1
    Jaynne1 Member Posts: 2 Newcomer

    This answer did not help. Sorry. I am looking how to amend my return to add new schedule D for nonbusiness loan not being paid back to me. Please advise. I still not have found the answer within the website and getting frustrated. Thank you for your help.

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  • KristineS
    KristineS FreeTaxUSA Agent Posts: 177
    edited August 9

    Hi Jaynne1,

    Thanks for the additional information.

    A non-business loan, or non-business bad debt, must meet certain criteria in order to be considered a loss to write-off on your tax return. It's reported on Form 8949, Sales and Dispositions of Other Assets as part of Schedule D.

    You claim a bad debt in the year it becomes worthless. It's deducted as a short-term capital loss.

    Here are some criteria the IRS uses to establish the nature of non-business bad debt:

    ✔ The loan must have been a bona fide loan, not a gift, with an expectation of repayment

    ✔ Charging interest, the borrower signing a repayment schedule or promissary note

    ✔ The debt must be 100% worthless, meaning there's no chance you'll get paid back

    ✔ You made efforts to collect on the debt - phone calls, text messages, letters, emails

    To include non-business bad debt in this case, you'll need to have started your amended return as previously described. Enter the bad debt on the Stock or Investment Sale Information screen. Enter the name of the debtor as the Description of Property. Enter zero as the Sale Price. Enter the date the debt became worthless as the Date Sold. Enter the amount of the debt as the Cost or Basis. Select "Various Dates Acquired - One Year Or Less" as the Date Acquired so the bad debt is treated as a short-term capital loss.

    If you e-file your return, be sure to keep all documentation and notes on the loss should the IRS request additional information. If you mail your tax return, include a brief letter of explanantion using the above criteria as a guide.

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