My husband loaned the company he was employed by moneyto keep the business going. They reduced the debt by 1/3. Then 2009 hit and in 2010 the company went into receivership and was purchased by another company. The new company did not assume any debt of the old company it purchased. Can we take a deduction on Schedule A, line 21? We can't take it on Schedule D as a short term loss because it was a business loan. Thanks, Joyce

“Can we take a deduction on Schedule A, line 21?”---->I think so; as employees who loan money to the businesses which employ you, and then can not obtain re-payment, you may qualify to deduct this debt on Schedule A line 21 as an un-reimbursed employment expense.
“We can't take it on Schedule D as a short term loss because it was a business loan.”----> You may deduct nonbusiness bad debts as short-term capital losses by filing Schedule D with your Form 1040 tax return. On line 1 of Part 1 of Schedule D.