Home Page link  

Lost deposit (forfeited deposit)

  
Groups | Search | About
User Password
Register Now! Lost Password?

Taxes General Forum - Tax professionals meeting place and answers to queries. (Moderated)

 Post an article  get this group's latest topics as an RSS feed add this group's latest topics to your My MSN content add this group's latest topics to your My Yahoo content  add this group's latest topics to your Google content  YahooMyWeb Yahoo!  Google Google  Windows Live Favorites Windows Live  del.icio.us del.icio.us  digg digg  Add to Netscape Netscape
Subject Author Date
Lost deposit (forfeited deposit) Peter 03-20-2007
Posted by Peter on March 20, 2007, 3:24 pm
Please log in for more thread options
 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

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Phoebe Roberts, EA on March 21, 2007, 1:47 pm
Please log in for more thread options
 Peter wrote:

> 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 :)

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Harlan Lunsford on March 21, 2007, 2:06 pm
Please log in for more thread options
Peter wrote:

> 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

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Frederick Lorca on March 21, 2007, 2:06 pm
Please log in for more thread options
> 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

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Seth Breidbart on March 23, 2007, 6:12 am
Please log in for more thread options
>> 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.

Is it income or part of the sale proceeds?

Seth

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Similar ThreadsPosted
Can I deduct a lost RE deposit? February 17, 2007, 4:58 am
Re: Lost deposit on proposed rental purchase June 6, 2006, 7:10 am
Re: Lost deposit on proposed rental purchase June 12, 2006, 8:40 pm
Re: Lost deposit on proposed rental purchase June 16, 2006, 2:59 am
Re: Lost deposit on proposed rental purchase June 17, 2006, 8:46 pm
Re: Lost deposit on proposed rental purchase June 20, 2006, 2:12 am
Rental deposit ? ? ? April 3, 2007, 2:07 am
Incorrect IRA deposit October 14, 2008, 12:39 am
Deposit US Treasury Check when outside US? July 27, 2008, 1:52 pm
Are we missing form for rollover deposit? April 8, 2008, 12:52 am

Contact Us | Privacy Policy
This site is not affiliated with Intuit - makers of Quickbooks and Quicken software
This site is not affiliated with Sage Software - makers of Peachtree accounting software
XML SitemapXML Sitemap