I purchased and gave away $900 worth of Sharper Image gift cards. Subsequently, the cards became worthless (Sharper Image declared bankruptcy). Can I, as the the purchaser of the cards, claim a non- business bad debt or casualty loss? Does it matter whether the worthlessness of the cards occurred only after I gave away the cards ? Can the recipient of the cards claim a loss?
WORTHLESS GIFT CARDS
Feb 19, 2009
1 Replies
I think only the recipient can claim a loss. You gave a gift, so you have no deduction. But the person who received the gift card has what looks to me like an IOU from Sharper Image, and now that that IOU is worthless, so I'd say it's a Schedule D short term deduction for them.
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