loss of earnest and deco money deposit from a failed real estate property

[hiakiu]

Hello,

I was trying to buy a new construction property as an investment and a rental house. I spent $20,000 for earnest money and $30,000 as deco deposit. However the transaction failed since the interest rates kept high and I terminated the transaction. Could I report it as a investment loss for tax deduction? And it would had been the first propery I owned, could it be identified as an investment property or should it be satistifed any requirements to be identified as an ivestment? (I would not live in the house since I would be in the different city when the house is built and I plan to make it a rental house initially.)

Thank you

[DMarkM1]

Yes, if the purchase was for a business (rental) property you can enter the transaction as the sale of an investment property in the "Investments" section.  "Add an investment" and select the "Land, ... other" tile.  

Enter the property as land (other investment) with description "Forfeited Escrow) sold with zero proceeds and enter your cost basis with the applicable dates (date escrow opened/date forfeited).  The result will be a capital loss.  

[Kaluk]

Hi,  I'm in an almost similar situation.... I have an LLC (partnership) had a 1031 exchange transaction and lost my earnest money to one of the offers.  Should I net it with the boots I received on line 15 form 8824? Or should I report it on form 1065 schedule D (I can't find an appropriate line on this schedule however)

Many thanks in advance for your advise