How is the write-off of a bad debt handled on the tax return?
Taxpayers generally use the specific write-off method of accounting in deducting bad debt. To determine whether a bona fide loan transaction has actually taken place: Does a note or other written instrument exist which evidences on obligation to repay? Have the parties established a definite schedule of repayment? Is a reasonable rate of interest stated? Would a person unrelated to the debtor make the loan?

How does the debtor have to handle the forgiveness of the debt?
The debtor has to handle the forgiveness of the debt by reporting the amount forgiven as income unless one of several tax law exceptions exists.

What qualifies as a deductible home office expense?
Generally speaking, normal business expenses can be deducted when operating a business out of one’s home. In addition, gas, electricity, and even depreciation on the home can be deducted for the area that makes up the home office – or, in other words, the percentage of the home that is used for business activities.

Form 8829 is used to file home office expense deductions. On this form allowable deductions are listed, including mortgage interest, real estate taxes, insurance, repairs and maintenance, utilities, depreciation, allowable operating expenses, and casualty losses.