Is it possible to write-off receivables from a related party transaction?

ANSWER

The BIDaWIZ Team's Answer:

The short answer is yes it's possible. However, we would need additional detail to understand if the related party does or does not fall under the definition as defined in IRC Section 267(b). In addition, the IRS and the Texas department of revenue will generally apply a higher level of scrutiny when dealing with writing off receivables between related parties. You'll need extensive supporting documentation to claim such as deduction. This is required even if the impact to your federal and state taxes is insignificant. This is referenced in IRC Section 166 and IRS publication 550 & 535.