The forfeiture of the deposit that you retained is ordinary income. It would be reported on line 21 of Form 1040, as it is not subject to social security and medicare tax. To enter in TurboTax:
- In the Income section scroll down to the last section titled Less Common Income and click Show More
- Select Start or Update next to the last topic titled Miscellaneous Income, 1099-A, 1099-C
- Scroll down to the last option titled Other reportable income and select start or edit
- When it asks "Any other reportable income? say Yes then type in a description and the amount to report it on your tax return.
This will place it on line 21 of your Form 1040.
