bad debt

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Related to Bad debts: doubtful debts, Provision for Bad Debts

bad debt

n. an uncollectible debt. The problem is to determine when a debt is realistically dead, which means there must be some evidence of uncollectibility or a lengthy passage of time. Discharge in bankruptcy, the running of the statute of limitations to bring a lawsuit, disappearance of the debtor, a pattern of avoiding debts or the destruction of the collateral security can all make a debt "bad." For income tax deduction purposes such a debt in business is deductible against ordinary income (found in Schedule C) and such a personal debt is deductible against short-term capital gains. A debt due for services rendered is not a bad debt for tax purposes, since there is just no income on which to be taxed.

bad debt

noun dishonored bill, inconvertible bill, irreeeemable bill, irretrievable debt, loss, outstanding debt, protested bill, uncollectible debt, write-off
Associated concepts: bad debt loss, bad debt tax deduction
See also: nonpayment
References in periodicals archive ?
The remaining approximately 20 percent of the additional bad debt charge expected in the third quarter relates to changes in collectibility of managed care accounts receivable.
While the IRS position on this matter is clear, there may be techniques for more aggressive taxpayers to secure bad debt deductions by planning for the possibility of "default" on child support payments at the time of divorce.
Litwin deducted as business bad debts the payments that were made to the bank in satisfaction of these guarantees.
Global Banking News-December 9, 2015--Indian banks might not meet bad debt clean up target in 2016
Four years ago, bad debts portfolio represented 30 per cent of the total credit portfolio, which the bank successfully reduced to 5 per cent during the previous fiscal year that ended in 30 June 2012.
3bn losses reported for 2009 after the HBOS takeover and financial crisis left Lloyds with a colossal pounds 24bn in bad debts.
It merely requires an understanding of the relationship between front-end resident screening and bad debt collections, plus a company-wide "credit culture" commitment to ensure credit extensions are consistent with strategic portfolio and risk-management objectives.
Almost three million credit card applications have been turned down in six months as providers get tough on bad debt, it was claimed.
O5bn provision for bad debts - after highlighting growing problems with US borrowers defaulting on mortgages.
In contrast, by mechanically adjusting book income for the $2 million increase in the allowance for bad debts account, ABC could not claim any portion of the $800,000 deduction until a write-off entry is recorded for financial accounting purposes.
BARCLAYS Bank is on course to make record profits of pounds 7bn this year - despite soaring bad debts at its credit card business.
THE amount of money set aside by Barclays to cover bad debts rocketed by 50 per cent in the first half of the year, it emerged yesterday.