We have been doing short-term rentals on a property for 6 years and attempted to sell it last year. The buyer did not close on the contract and forfeited his deposit. I know this is considered ordinary income but I don't know where to enter it. I would prefer to enter it on Schedule E to offset the overall loss we have on the property.
If the forfeited deposit is not entered on Schedule E, where do I enter the expenses we had associated with the failed sale?
