I am Batman—and even I can’t escape the sting of Aquaman’s deadbeat behavior. When a loan goes unpaid, the IRS doesn’t just ignore it, so here’s what I can do on my taxes:

1. Determine the Nature of the Loan:

If the loan was made in the course of business—for instance, as part of Wayne Enterprises’ financing operations—it could qualify as a business bad debt. In that case, the loss is deductible as an ordinary loss, which is a more favorable treatment.

However, if the loan was a personal one, it falls into the realm of nonbusiness bad debt. Nonbusiness bad debts are treated as short-term capital losses.

2. Document, Document, Document:

The key is a mountain of evidence: a written agreement, proof of the funds transferred, and a clear record of all your efforts to collect. Without this documentation, the IRS might not take your claim seriously—even if Aquaman’s excuses are as flimsy as his underwater excuses.

3. Claiming the Loss:

• For a business bad debt, the loss is deducted on your business tax return, reducing your ordinary income.

• For a nonbusiness bad debt, the loss is reported as a short-term capital loss on Schedule D of your tax return. Keep in mind, capital losses can only offset capital gains plus up to $3,000 of ordinary income per year, with any excess carried forward.

4. Be Prepared for Scrutiny:

The IRS isn’t known for leniency when it comes to questionable debts. Every detail must be ironclad. Ensure your records show that the debt became totally worthless—that’s the moment when you can legitimately claim the deduction.

In Gotham, as in taxation, precision is everything. Aquaman’s failure to pay means I can reclaim some fiscal justice, provided I follow the IRS’s rules to the letter. No deadbeat—no matter how notorious—escapes the long arm of the tax code.