If someone doesn’t pay rent, and I claim that as a loss, do they have to pay taxes on it?
I’m not a tax attorney, but as far as I understand, if you write off a debt, it doesn’t erase the debt on the tenant’s side or count as income for them because you claim the loss. Technically they still owe you the money and may pay in the future, in which case you would have to record it as income at that point for tax purposes.
It might be different if you actually forgive the debt, but writing it off is just an internal accounting thing on your side, it doesn’t actually change the fact that they are liable for that money.