Ruling 1948
If a person who must give zakat is owed some amount by a poor person, he can count the amount he is owed by the poor person towards his zakat.
-Ayatullah Sistani, Practical Laws of Islam, Alms Tax (Zakat)
Alms Tax: Counting a Debt Owed by a Poor Person as Zakat
Practical Laws of Islam as per the teachings of Ayatullah Sistani
