Where can I enter a bad debt for an 1120 or 1120-S return?
Enter total business-related debts that became worthless in whole or in part during the year in the Bad debts field on the DED screen. Bad debts carry to line 15 of the 1120 and line 10 of the 1120-S.
Enter a deductible, non-business bad debt as a short-term capital loss on screen 8949 (Capital Gains & Losses).
Cash method corporations cannot take a bad debt as a deduction unless the amount was previously included in income.
For more information on business and non-business bad debts see
- Publication 535, Business Expenses, Chapter 10
- Publication 550, Investment Income and Expenses (Including Capital Gains and Losses), Nonbusiness Bad Debts.
An attachment will be required for each bad debt reported. For more information on attaching documents to a return, see Related Links.