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My adult brother has been paying monthly payments to me for a place to live in my home. This was to cover rent and electricity, gas, water, and trash. Payments were not for his food, car insurance, personal phone, gas for his car...etc. His bill for year 2000 was $350 x 12 =$4200.

He only gave me $200 the whole year. $100 in Nov in $100 on Dec 31. Starting the year 2000 has was an additional $350 in arrears. Can I decrease my tax burden for the $4350 I'm owed but will never collect?

Based on the facts presented, my opinion is no. It seems clear to me that you didn't have a business arrangement, like a rental, with your brother or you would have evicted him long before he ran up such a debt. (I'm not being critical of your not evicting him, just pointing out that it indicates that no debt was established.)

The only thing I can think of that would reduce your taxes would be if you could claim your brother as your dependent. You'll find information about the five tests for dependency in the FAQ and in IRS Publication 501.

Phil Marti
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