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Retaining Earnest Money

Hello, 

The buyer of the property canceled the deal just a few hours before signing the final documents.  Is the retaining earnest money an income for the seller to be entered on TurboTax?  If so, where?  Thanks for your help.   David

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Accepted Solutions
ErnieS0
Expert Alumni

Retaining Earnest Money

Yes. A forfeited deposit is income to you. The would be buyer paid you for the right not to sell the property to anyone else for a specified period of time.

 

Report this as Other Income.

 

  1. Click Federal in the left column
  2. Click Wages & Income 
  3. Scroll down to Less Common Income. Tap Show more
  4. Select Miscellaneous Income, 1099-A, 1099-C
  5. Select Other reportable income
  6. Say Yes to Any Other Taxable Income?
  7. Enter a description (forfeited earnest money) and amount ($xxx) 
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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2 Replies
ErnieS0
Expert Alumni

Retaining Earnest Money

Yes. A forfeited deposit is income to you. The would be buyer paid you for the right not to sell the property to anyone else for a specified period of time.

 

Report this as Other Income.

 

  1. Click Federal in the left column
  2. Click Wages & Income 
  3. Scroll down to Less Common Income. Tap Show more
  4. Select Miscellaneous Income, 1099-A, 1099-C
  5. Select Other reportable income
  6. Say Yes to Any Other Taxable Income?
  7. Enter a description (forfeited earnest money) and amount ($xxx) 
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Retaining Earnest Money

ErnieS0, Thank you so much for your quick response. Highly appreciated.    David

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