SESKStuff Everyone Should Know
SESK: Stuff Everyone Should Know · sesk.info/founder-bad-debt-records-seven-years

How long should records supporting a bad debt deduction be kept?

Keep them for seven years.

Start playing free

  1. Three years
  2. Seven years ✔
  3. Thirty days

Why: The IRS lists a seven-year retention period for a claim involving worthless securities or a bad debt deduction. Preserve documents that show the debt and why it became worthless.

Huh, didn't know that: The correct retention period depends on the event and tax claim the record supports.

The dad joke
Why did the bad debt file stay longer? It had a seven-year engagement.
Like this card?
Play the game

References

Answer: Seven years. The IRS lists a seven-year retention period for a claim involving worthless securities or a bad debt deduction. Preserve documents that show the debt and why it became worthless.

  1. IRS How long should I keep records? www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records
    Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
    Checked 2026-10-11.

Think this answer is wrong? Tap "Challenge this answer" on the card in the game and tell us why.

Test yourself in the game

Starting and Running a BusinessHow can a profitable business still run out of cash?Starting and Running a BusinessWhich statement shows whether a business earned a profit?Starting and Running a BusinessWhat does cash flow measure?

That's stuff everyone should know.