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Greg RZB
Level 1

loss of earnest money deposit from a failed investment real estate property

Hello,

 

I lost an earnest money deposit (EMD) in a failed real estate transaction. I was trying to buy an investment property (rental house with tenants in it), which I was going to continue to operate as a rental property. I also spent $ on an appraisal and house inspection.

From what I read, the loss of the EMD is a capital loss and can be claimed in Schedule D.  However, I don't see where I can enter this loss in Schedule D. 

1. Can someone guide me through the steps for claiming the loss of my EMD as a deduction?

2. Where in Turbo Tax can I deduct the expense for the appraisal and house inspection?

 

Thank you

4 Replies
Mike9241
Level 15

loss of earnest money deposit from a failed investment real estate property

in interview/step-by-step mode you'll come to a section for investments 

you either click on add more sales 

no to 1099-b

then check the box everything else 

then you will come to a screen to enter the description and other info

then you can enter the amount it cost you

 

if you have a version that has forms mode instead you can type in 1099-B

and then click on the 1099-B worksheet

Greg RZB
Level 1

loss of earnest money deposit from a failed investment real estate property

@Mike9241 My version of TurboTax has both step-by-step and forms mode. However, the help instructions below are abbreviated and I am not able to follow.  I am a beginner using the software and I could use more detailed help.  Thanks.  

ljzielke
New Member

loss of earnest money deposit from a failed investment real estate property

I have a similar question, but instead of the property being purchased by me it was purchased by an LLC, which I am a member of.  Do I still claim this loss on schedule D?

ThomasM125
Expert Alumni

loss of earnest money deposit from a failed investment real estate property

@ljzielke The loss would be reported on the LLC tax return and then reflected on the k-1 schedule that you receive from it.

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