Where do I enter bad debt on 1065 return?
Use the DED screen to enter the total of all bad debts that became worthless during the 20YY tax year, but only if these debts were related to a trade or business activity. Deductible non-business bad debts should be entered as short-term capital losses on screen 8949.
Drake Software Supplemental Manual: Partnerships (1065)
Note: Cash-method partnerships cannot take a bad debt as a deduction unless the amount was previously included in income.