We had vacant land for sale, went under contract, the buyer backed out and we received the deposit. Do we report that income, and if so, how?

[CrazyN8]

We did not sell the property and still own it.

[MinhT1 · Accepted solution]

I would advise that you report this amount as Other Reportable income and describe it as Deposit forfeited by buyer.

In TurboTax, open your return and follow these steps:

1. Click on Federal in the left-hand column, then on Wages and Income
2. Continue and locate the Less Common Income section
3. Click Show more and click Start next to Miscellaneous Income at the bottom
4. On the next page, click Start next to Other Reportable Income.