Can I claim a loss on this?

Options
slabogen68
slabogen68 Member Posts: 1 Newcomer

I have been working with a small boat maker in FL. I have already sent him $55K in multiple deposit in 2022-2023. Unfortunately, I believe he is filing for bankruptcy. I am not familiar with this type of situation, so I was wondering if there is possibility to claim a loss while filing tax return.

Tagged:

Answers

  • KristineS
    KristineS FreeTaxUSA Agent Posts: 109
    Options

    Hi slabogen68,

    I'm not sure I understand the question completely, but it sounds like you have paid a boat maker $55,000 between 2022 and 2023, to build you a boat? And it was not complete or you didn't get the boat as promised.

    You may have some legal recourse and file to become a creditor, but for income tax filing purposes there is not loss to claim on the $55,000 you sent. You simply paid money for a product you didn't get, and unfortunately, lost that money. Unlike a bad debt where someone presonally owes you money and you might be able to claim some tax benefit from that if certain conditions are met, there is nothing to claim on your tax return for the $55,000 you have already paid.