I entered into a contract to buy a property for investment intention was to sell it later for a profit. Contract did not go through due to unforeseen circumstances and I lost the Earnest money.

What form I should use to claim a deduction in tax returns? Pravin - Normally earnest money that you forfeit is not deductible, if for example, you had intended to purchase a personal residence.

However, since you are stating that this was potentially investment property you in order to deduct your investment expenses, you must be able to itemize deductions on Schedule A Form Enter the total amount of your investment expenses other than interest expenses on Schedule A, line List the type and amount of each expense on the dotted lines next to line If necessary, you can show the required information on an attached statement.

For additional information about investment income and expenses please see IRS PublicationInvestment Income and Expenses.

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Can lost earnest money be deducted on tax returns

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Can I write off the lose of earnest money while trying to buy a - TurboTax Support

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