This large business purchase was intended to be half art studio on bottom, half residence up top with the residence being rented to my husband and I. We experienced some zoning issues, and ultimately the delays ended up costing us the contract on the house and $15k in earnest money. I know you cannot write off personal lost earnest money, but since it was a member equity injection into our business is it possible to write it off as a capital loss under the business on my Schedule C? If so, what is the best terminology for this and where does it fit in my Turbo Tax form?
