I attempted to purchase a rental property in 2015 but had to forfeit my good faith deposit when the cost of the rehab work necessary to make it rentable just didn't pencil out. I believe I can deduct that loss, and forgot to then, so I'm now preparing an amendment to my 2015 taxes. How do I declare this loss?
In order to enter a capital loss in TurboTax Premier (Windows) do the following:
In order to enter a capital loss in TurboTax Premier (Windows) do the following:
Yes, you can deduct these costs as a capital loss.
Here's what IRS Publication 535 says about an unsuccessful startup.
If your attempt to go into business is unsuccessful. If you are an individual and your attempt to go into business is not successful, the expenses you had in trying to establish yourself in business fall into two categories.
The costs you had before making a decision to acquire or begin a specific business. These costs are personal and nondeductible. They include any costs incurred during a general search for, or preliminary investigation of, a business or investment possibility.
The costs you had in your attempt to acquire or begin a specific business. These costs are capital expenses and you can deduct them as a capital loss.