No. You cannot deduct lost earnest money deposits. IRS states this on their website:
"Nondeductible payments.
You cannot deduct any of the following items.
Insurance (other than mortgage insurance premiums), including fire and comprehensive coverage, and title insurance.
Wages you pay for domestic help.
Depreciation.
The cost of utilities, such as gas, electricity, or water.
Most settlement costs. See
Settlement or closing costs
under Cost as Basis, later, for more information.
Forfeited deposits, down payments, or earnest money."
