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Discussion
Ashley is an attorney who specializes in family law. She uses
the cash method of accounting and is a calendar-year taxpayer.
Last year, she represented a client in a lawsuit and billed the
client $5,000 for her services. Although she made repeated
attempts, Ashley was unable to collect the outstanding
receivable. Finally, in November of the current year, she finds
out that the individual has moved without leaving any
forwarding address. Ashley’s attempts to locate the individual
are futile.
What is the amount, if any, of the deduction that she may claim
in connection with this bad debt?

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DiscussionAshley is an attorney who specializes in family law. She.docx

  • 1. Discussion Ashley is an attorney who specializes in family law. She uses the cash method of accounting and is a calendar-year taxpayer. Last year, she represented a client in a lawsuit and billed the client $5,000 for her services. Although she made repeated attempts, Ashley was unable to collect the outstanding receivable. Finally, in November of the current year, she finds out that the individual has moved without leaving any forwarding address. Ashley’s attempts to locate the individual are futile. What is the amount, if any, of the deduction that she may claim in connection with this bad debt?