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-   -   We lost a lot of money, is this deductiable? Please help. Thanks! (https://www.askmehelpdesk.com/showthread.php?t=23385)

  • Mar 25, 2006, 03:27 PM
    cluelessone
    We lost a lot of money, is this deductiable? Please help. Thx!
    Dear all,

    We are a couple living in NY (USA).
    Last year we were purchasing a house (as our main residence) but the deal fall through. We lost part of the deposit in the amount of $15,000 to the owner.

    While I know the owner must file for profit for this money... Can we deduct it as investment lost?

    Is this expense deductiable to the IRS?

    If it is deductable as investment lost, which form should we use?

    Please help.

    Clueless one
  • Mar 25, 2006, 11:46 PM
    AtlantaTaxExpert
    Clueless One:

    You cannot deduct it on your 2005 return.

    You can add the loss to the basis of the house you eventually will buy, but it is likely to have any tax effect.

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