Where do I enter income from a forfeited real estate deposit on the sale of our rental property?

[Getsmarts]

We have been renting out a condo for the last several years including the start of this year.  We listed the condo for sale in early 2020.  A buyer gave us a great offer pre-COVID but did not close on the contract so forfeited the deposit.  We ended up selling the property later in the year for far less than what the original offer was.  Where should this income be entered within TurboTax Premier?    I would like to offset some of the rental loss if that makes sense on Schedule E, or would it have to be ordinary income (Miscellaneous Income - Other Reportable Income?) ending up on line 21 of 1040?

[MinhT1 · Accepted solution]

You should not offset the forfeited deposit against the rental loss but should report this as Other Reportable income.

In TurboTax, open your return and follow these steps:

• Click on Federal in the left-hand column, then on Wages and Income on top of the screen
• Scroll down to All Income, locate the Less Common Income section
• Click Show more and click Start next to Miscellaneous Income at the bottom
• On the next page, click Start next to Other Reportable Income.