Legal Question in Tax Law in California
I invested 25k in my friends S-corp 4 yrs back. If this investment had turned into a profit, I would have gotten a 1099 from my friends company Plus the principle. However, he got embezzled by someone else and lost all my investment. He sued that person, won the law suit, but I doubt we will be able to recover any money.
Question: Can I show 25k as a business loss in my Tax return or should it be theft loss ?
Asked on 2/07/13, 2:49 pm
1 Answer from Attorneys
Robert Kubler
The Kubler Law Firm
" I doubt we will be able to recover any money." - Your doubt in collecting that debt doesn't qualify as a business loss.
No to theft loss. Also regarding business loss, are you still a shareholder/partner in the S-corp? It matters.
Answered on 2/07/13, 8:33 pm
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