I made an investment in a house in construction ,my intent was rent the house when completed... paid for some upgrades and earnest money a total of $25K and because of an issue, house was close to a landfill, I back out of the offer and I lost the earnest money and upgrades money can I declare this as a loss on my tax return?? I am think it was an investment and I lost the money... and if yes, what are the form and steps to do this in the online Turbotax software?
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This is from a Champ: lost-earnest-money-deposit-on-a-house-that-i-intend-to-use-as-the-rental-property
If you lost earnest money due to a failed business purchase of a rental home, you may claim the loss. The loss would be considered a capital loss you would write off on your Schedule D.
In the program, go to:
I am sorry this investment opportunity did not work out as you would have hoped. The good news is that, as this was an investment property, you can claim the loss on your tax return.
The loss would be treated as a capital loss and reported on Schedule D of your tax return. For the date acquired, you would use the date the money was placed in escrow. The loss would be long or short term depending on how long the funds were in escrow. The cost would be the amount of serious money you put in. The sales price would be zero,
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