That is, say a debtor owes me $10,000.
I agree to settle for $6,000.
Can I take the $4,000 as any kind of deduction? Business loss, unpaid debt, etc.? Can I also deduct (from my taxes as a loss) any attorney fees, if the original agreement, and subsequent judgments that the agreement is valid, agree(s) that debtor pay all attorneys' fees in the event of default?
I lived in MS and the debtor lived in GA at the time of the agreement; I live in CA and the debtor lives in FL, if that's relevant.
Thanks for your help!