My friend put in a $50,000 deposit to acquire a property in NV. The mortgage was not approved. So he lost the deposit. There was no contingency on Earnest's money! How does he reflect the loss of deposit and plus appraisal fee on this property on his tax returns? Schedule E? He has been actively involved in Real estate investment in 2020 and acquired 10 properties. So real estate activities are active income for him, not a passive one.
