I'm pretty sure the answer is no, but I thought I would ask anyway.

I entered into a contract with a client to develop an Access database application. The contract terms were for half the fee upon delivery of an initial prototype and the balance upon completion. The first half was paid, but the client never paid the second half, even though I delivered a final version.

So the question is, can I claim the unpaid half as a business loss?

Why not sue him instead of claiming a loss?

Why not sue him instead of claiming a loss?

I'm considering that, the problem is the client is in Kansas.

I wanted to know what my other options were.

I agree with your conclusion that the loss is not deductible. This assumes you are a cash basis taxpayer.