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Lost deposit (forfeited deposit)

I lost a deposit when trying to buy a house. I called the irs and they informed me that the lost deposit is not deducible because it is a personal loss. What I don't understand is that the home owner kept this deposit and can simply not claim this deposit as income. The irs will never know since I can not deduct the loss. Shouldn't the person getting the deposit have to claim this as income? Anybody know if this personal loss is really not deductible some other way? Thanks, John

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Reply to
Peter
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The IRS wouldn't know it was income to them even if you did deduct it.

Maybe. I don't know off the top of my head if it would qualify as excludable gain from sale of a personal residence, but my initial reaction is that it would. It's not your business, in any case.

Really not deductible. Sorry.

Phoebe :)

Reply to
Phoebe Roberts, EA

The forfeited deposit is income to the home owner and a personal, nondeductible loss to you. Frederick Lorca

Reply to
Frederick Lorca

Exactly. It IS income to him, and he will report it on his

1040.

True, for you it is a personal expenditure, and therefore not deductible. Nowhere. Nohow. No way.

ChEAr$, Harlan Lunsford, EA n LA

Reply to
Harlan Lunsford

Is it income or part of the sale proceeds?

Seth

Reply to
Seth Breidbart

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