Your loss is probably not deductible. The loss would have to be associated with a business to be deductible. Unless you are a real estate dealer, meaning you earn your livelihood purchasing and/or renting out real estate, the attempted purchase of a rental home would not be considered a business activity. You can't report a rental activity and then simply deduct the loss on the deal you experienced. It would only be deductible against rental income, which you don't have as the house was never purchased or rented out.
@xiaoliling2
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