I would think there are a couple of issues with adding to the cost basis of the building that was purchased.
For one, expenses (as opposed to improvements and closing costs) typically cannot be added to the basis of property if the expenses are not otherwise deductible.
Further, and obviously, the deposit was for a different building so adding the deposit to the basis of the current building is a real stretch.
@jvtec87 may be out of luck unless the lost deposit is the subject of a lawsuit and the builder becomes a judgment debtor.
