If you were purchasing the property as an investment, a forfeited deposit can be deducted.
It would be treated as an investment expense and you would have to itemize deductions in order to claim it as such.
See "Other Investment Expenses" interview in Personal Income > Deductions and Credits > Retirement and Investments.
(IRS Publication 530 specifically notes that "forfeited deposits" aren't tax-deductible on your tax return, but that refers to the purchase of a personal residence).
