Personal Debt-Information On Average Personal Debt, Personal Debt Consolidation Loan, Personal Debt Consolidation

Steven M asked:


On June 6, 2003, Susan Stewart, one of Bernard’s stylists, left town to get away from a troublesome ex-husband. To help Susan establish a business elsewhere, Bernard loaned her $5,000. Susan signed a note dated June 4, 2003, that was payable on demand and provided for 5% interest. On October 5, 2006, Bernard learned that Susan had just been declared bankrupt and was awaiting trial on felony assault charges. Bernard has never received any interest on the loan.

I think this is personal bad debt. Is it fully deductible in 2006 though? I also think it would be a short-term capital loss, so if it is fully deductible then only $3,000 would be deducted in 2006. Is this right?

Lastly, where on the tax form is such a deduction reported?
Where in turbotax is this reported?
Bernard loaned Susan the money so she could start a business of her own.

Marc

LINDSEY S asked:


we are trying to get ourselves out of debt but we only seem to be digging ourselves a deeper hole. we have tried to cut back on spending but it seams that something comes up everymonth. for example last month my bf had his company computer stollen and the expenses department wouldn’t cover it. we do pay our bills and credit cards and don’t use unless we have to. my bf doesn’t want a loan and doesn’t want to ask my parents for money since they are paying for most of my sisters wedding. does any one have any tips on how to consolidate or at least start to dig ourselves out of this?
my bf has bad credit. and can get a line of credit at the moment. i don’t belive myself in haing credit cards.
we had a line of credit but the bank took it away BY ACCIDENT and we can’t get it back.

Benjamin