Legal Question in Real Estate Law in California

Deductibility of Real Estate Contract Deposit Default

This past year my husband and I entered into a contract to purchase a new home from a builder. After a few months went by and we saw housing prices drop and I lost my job, we decided to back out of the contract and forfeit the deposit. Is this deposit loss a tax deductible event?


Asked on 1/20/08, 5:15 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Deductibility of Real Estate Contract Deposit Default

I don't think so, unless you are in the business of buying and selling houses. I could be wrong; I'd pose the question to the IRS by phone.

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Answered on 1/21/08, 1:39 pm


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