I have a rental property. Was looking to rebuild a shed on my property. The builder took my $9k deposit but did not build and went bankrupt. Can I write off the loss?

They were supposed to build in 2023 but went bankrupt in 2024 about May/June

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I have a rental property. Was looking to rebuild a shed on my property. The builder took my $9k deposit but did not build and went bankrupt. Can I write off the loss?

In TurboTax Premium Online, report the loss of income-producing property.

Down the left side of the screen, select Federal.
Down the left side of the screen, select Deductions & Credits.
Click the down arrow to the right of Other Deductions and Credits.
Click to the right of Disasters, theft, and other property loss or damage.

The loss was realized in 2024 when the bankruptcy was finalized.

See also IRS Publication 584-B.

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