bad debt

Definition of "bad debt"
  1. A debt that's uncollected and can be deducted from ordinary income or as a short-term capital loss, depending on who's owed
How to use "bad debt" in a sentence
  1. The business had to write off the considerable bad debt and adjust their income.
  2. As the loan became a bad debt, the lender could deduct it as a short-term capital loss.
  3. If the business writes off a bad debt, the debtor might need to pay tax on the amount of the debt.

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