26 U.S.C. § 166
Bad debts
United States · Title 26 — INTERNAL REVENUE CODE · Status: effective
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- Citation
- 26 U.S.C. § 166, Bad debts, United States, version 1 as recorded 2026-07-09, yourstate.us, https://yourstate.us/provision/462253
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Full text
There shall be allowed as a deduction any debt which becomes worthless within the taxable year.
When satisfied that a debt is recoverable only in part, the Secretary may allow such debt, in an amount not in excess of the part charged off within the taxable year, as a deduction.
For purposes of subsection (a), the basis for determining the amount of the deduction for any bad debt shall be the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.
In the case of a taxpayer other than a corporation—
For purposes of paragraph (1), the term “nonbusiness debt” means a debt other than—
This section shall not apply to a debt which is evidenced by a security as defined in section 165(g)(2)(C).
Legislative history
The public laws that enacted or amended this section. Tallies are for the whole bill as it passed each chamber — often an omnibus covering far more than this provision — not a vote on this section alone. The law that originally enacted this section predates the public laws loaded here, so only later amendments are listed.
- Tax Reform Act of 1976House: no recorded tallySenate: no recorded tally
- Deficit Reduction Act of 1984House: no recorded tallySenate: no recorded tally
- Tax Reform Act of 1986House: no recorded tallySenate: no recorded tally
- Technical and Miscellaneous Revenue Act of 1988House: no recorded tallySenate: no recorded tally