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Level 3
posted Apr 15, 2023 12:04:52 PM

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

0 2 142
1 Best answer
Expert Alumni
Apr 15, 2023 5:50:57 PM

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) 

2 Replies
Expert Alumni
Apr 15, 2023 5:50:57 PM

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) 

Level 3
Apr 15, 2023 11:17:05 PM

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