EFTA01196022.pdf

AMERICANS ELECT 2012 January 2, 2013 Leon Black 9 West 57th Street New York, NY 10019 RE: Notice of Dissolution of Americans Elect Dear Mr. Black: This letter is to notify you that Americans Elect has dissolved effective as of December 12, 2012. You have provided to Americans Elect an unsecured loan in the amount of $250,000 pursuant to a loan agreement executed on December 5, 2011. As of the time of its dissolution, Americans Elect has no assets with which to repay, in whole or in part, your loan. Please return the attached notice of demand for repayment by May 30, 2013 to preserve your right to claim repayment of your loan. If ou have any questions, please contact Tom Richardson, Americans Elect's counsel, at Thank you for your support of our work. eter Ackerman Chairman AmericansElect.org Americans Elect is a 501(c)(4) organization, and contributioas are not deductible for federal Income tat purposes. Americans Elect is not affiliated with and does not support or oppose any particular candidate or candidate's committee. EFTA01196022 Leon Black : $250,000 loan to Americans Elect Topic 453 - Bad Debt Deduction N someone owes you money that you cannot collect you may have a bad debt For a discussion of what constitutes a valid debt refer to publication 550 knestment Income and Expenses, and publication 535, allattaSS Expanses. To deduct a bad debt u must have previously included the amount In your Income or loaned outyour cash. /you are a cash basis taxpayer. deduction for money you expected to receive but did not (for example, for money owed to you for services performed, or rent) because hat amount was never Included in your income. Far a bad debt, you must show that there was an intention at the lime of the transaction to make a loan and not a gift If you lend money to a relative or friend will the understanding that It may not be repaid. it is considered a gift and not a loan. There are two kinds of bad debts — business and nonbusiness. Generally, a business Dad debt is one that comes from operating your Lade or business. The following are examples of business bad debt (if previously included In income): • Loans to client and suppliers • Credit sales to customers, or • Business loan guarantees A business deducts its bad debts from gross Income when figuring its taxable income. Business cad debts may be deducted In part or In MI. You can claim a business bad dote using either the spec 5c chargeort method or the nonacaual-experience method. Mt other bad debts are nonbusiness. tionbusiness bad debts must be totally worthless to be deductible. You cannot deduct a partially worthless nonbusiness bad debt A debt becomes worthless when tho surrounding facts and circumstances indicate there is no reasonable expectation of payment. To show that a debt is worthless, you must establish that phi have taken reasonable steps to collect the debt it Is not necessary to go to court N you can show mat a judgment from the court would be uncollectiolo. You may take the deduction only In the year the debt becomes worthless. You do not have to wait until a debt Is due to determine whether it Is worthless. A nonbusiness Dad debt Is reported as a short-term capital loss on Form 9949 (PDF), Sates and ether a:vast/ode ofCapital Assets, Part 1. line 1. Enter the name of the debtor and 'bad debt statement attached' in column (a). Enter your basis in me bad debt in column if) and enter zero In column (e). Use a separate tee for each bad debt his subject to the capital toss limnallons. A nanbusiness bad debt deduction requires a separate debited statement attached to your return. For more Information on nonbustheSS bad itetits. refer to Publication 550. Investment Income and &domed For more information on business Dad debts, refer to Pu oticell on 135,, Stivnes3 EX0.11388. More Tar Tools CrIleaelirn Page LaStReviewad of Updated. January 29, 20f3 EFTA01196023