Lost deposit (forfeited deposit)


P

Peter

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
 
Last edited by a moderator:
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P

Phoebe Roberts, EA

Peter said:
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.
The IRS wouldn't know it was income to them even if you did
deduct it.
Shouldn't the person getting the deposit have to claim this
as income?
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.
Anybody know if this personal loss is really not deductible
some other way?
Really not deductible. Sorry.

Phoebe :)
 
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F

Frederick Lorca

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

Frederick Lorca
 
Last edited by a moderator:
H

Harlan Lunsford

Peter said:
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?
Exactly. It IS income to him, and he will report it on his
1040.
Anybody know if this personal loss is really not deductible
some other way?
True, for you it is a personal expenditure, and therefore not
deductible. Nowhere. Nohow. No way.

ChEAr$,
Harlan Lunsford, EA n LA
 
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S

Seth Breidbart

I lost a deposit when trying to buy a house.
The forfeited deposit is income to the home owner and a
personal, nondeductible loss to you.
Is it income or part of the sale proceeds?

Seth
 
Last edited by a moderator:

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