I lost $5000 in earnest money when I decided not tp buy a property and another $6000 in upgrades can I take that as a loss anywhere

Forum|Forum|6 years ago
June 3, 2019
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Patrice11

Employee

No. You cannot deduct lost earnest money deposits. IRS states this on their website:

"Nondeductible payments. You cannot deduct any of the following items.

Insurance (other than mortgage insurance premiums), including fire and comprehensive coverage, and title insurance.

Wages you pay for domestic help.

Depreciation.

The cost of utilities, such as gas, electricity, or water.

Most settlement costs. See Settlement or closing costs under Cost as Basis, later, for more information.

Forfeited deposits, down payments, or earnest money."

http://www.irs.gov/publications/p530/ar02.html

maraujo68

What is the house I was buying was for investment, means I was buying this house for my rental portfolio, I own several rental properties, this was one more. I back out of the deal and lost upgrades money and earnest money. (the house was close to a landfill) .. in this case can I declare a investment loss? and how I enter on the system?