Retaining Earnest Money

[dazimi]

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

[ErnieS0 · Accepted solution]

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) 

[dazimi]

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