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New Member
posted Jun 3, 2019 1:31:52 PM

I lost $5000 in earnest money when I decided not tp buy a property and another $6000 in upgrades can I take that as a loss anywhere

0 2 7505
2 Replies
New Member
Jun 3, 2019 1:31:53 PM

No. You cannot deduct lost earnest money deposits. IRS states this on their website:

"Nondeductible payments.   You cannot deduct any of the following items.

  • Insurance (other than mortgage insurance premiums), including fire and comprehensive coverage, and title insurance.

  • Wages you pay for domestic help.

  • Depreciation.

  • The cost of utilities, such as gas, electricity, or water.

  • Most settlement costs. See   Settlement or closing costs  under Cost as Basis, later, for more information.

  • Forfeited deposits, down payments, or earnest money."

http://www.irs.gov/publications/p530/ar02.html

New Member
Oct 30, 2024 12:21:15 PM

What is the house I was buying was for investment, means I was buying this house for my rental portfolio, I own several rental properties, this was one more. I back out of the deal and lost upgrades money and earnest money. (the house was close to a landfill) .. in this case can I declare a investment loss? and how I enter on the system?