Page 54 - F6 Slide - Taxation - Lecture Day 2

Bad debt s 11(i)

Deductible if debt:

• is due to the taxpayer; and

• was incl. in the taxpayer’s income for the current or any

previous year of assessment; and

• have become bad during the year of assessment

Will a loan written off as bad debt be deductible?

• Bad debt recovered must be included in gross income

• If bad debts are recouped by way of insurance contract –

s 23(c) prohibits the deduction of bad debt as a loss (recoverable)