Say I loan $5,000.00 to a relative, and they still owe the majority of that amount after many years of no payment. Can I just vaguely write off this number, assuming the money was lent as cash, hand-to-hand? Or electronic transfers, such as bank withdrawals? Can I claim this (non-employee)?
I file business taxes (Schedule C Profit/Loss). Can I add this as a deduction on there?
I cannot prove what the money was lent for nor the amount since it's just personal bank transactions or out-of-pocket loans. I want to know how reasonable this is also and how the IRS would know if one is lying or not in such predicaments (especially with personal matters).