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No, the down payment for a home purchase is not deductible. However, other items relating to your home are deductible--for example, mortgage interest, property taxes, private mortgage insurance and loan origination fees (points) you paid in 2016.
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I signed a contract to purchase a home in November 2019. The down payment was $5000. I February 2020 we had to back out of the contract and lost the $5000. The home builder kept the $5000. Is the lose tax deductible?
No. This is not something that is deductible.
If the home purchase was a business investment can the $5000 down payment then be considered tax deductible?
If you were purchasing the property as an investment, a forfeited deposit can be deducted.
It would be treated as an investment expense and you would have to itemize deductions in order to claim it as such.
See "Other Investment Expenses" interview in Personal Income > Deductions and Credits > Retirement and Investments.
(IRS Publication 530 specifically notes that "forfeited deposits" aren't tax-deductible on your tax return, but that refers to the purchase of a personal residence).
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