You could claim the loss as a non-business bad debt. Or you could claim it as a miscellaneous itemized deduction to the extent that it exceeds 2 percent of your adjusted gross income. "In most cases, the non-business bad debt would be the best option because there's no threshold to cross," he says. "It would be a short-term capital loss on schedule D, and it would offset any capital gains you have, dollar for dollar."
In other words, a $12,000 capital loss would wipe out the tax on a $12,000 capital gain.