You can only take a bad debt deduction if the amount you were owed was included in your grossincome for theyearthe deduction is claimed or for a prior year.
The newly extended enhanced incentive allows a non-farmer donor to use a conservation donation deduction to wipe out 50% of his grossincomein any year, up from the normal 30% that is a permanent part of the law.
That's because an overpayment one year must be included in adjusted grossincomethe next, which can limit eligibility for the child credit, education credits, a Roth IRA, itemized deductions or even personal exemptions.