I lent a family member a credit card to help them out in a time of need and they piled up a balance on it over the course of a year. He was supposed to have zeroed down the card within the year. I ended up making the full $8700 payment on the card (including any interest compiled over the months). Since he's pretty maxed out financially, it's unlikely he'll be paying me back. I know I can deduct $3000 a year from my income for non-business bad debt deduction (as a short term capital loss) but, would my situation qualify? It clearly was not a gift since I gave my credit card which he used responsibly for only about 2 months ; but it also wasn't a straight up loan with any official promissory notes or anything. Can I file this deduction myself or do you recommend getting a tax professional? I contacted a CPA close to me and their minimum charge is $400; any affordable recommendations for a good CPA? Any advice would be appreciated as I made $120k last year and as I am calculating thus far, I would owe the IRS an additional $2000 in taxes with me and my wife's combined gross income of $150k despite having only 2 allowances on my W4 (and having paid substantial tax already).
☰