LLTS wrote:

- quote -

First, I'd like to know why he lost the deposit - though it
may not matter.

Depending on the client's tolerance for risk, I think I
could make an argument that it was an ordinary business
loss. I'd put it on Form 4797 as the loss on a trade or
business property.

Good luck,
Gene E. Utterback, EA, RFC

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I'll take a stab at this one. I would say that he bought an
option for $10,000 to buy a property and the option expired
worthless. Option trades belong on Sch. D. This is a short
term transaction that would appear on Sch. D and would be
limited to $3,000/$1500 per year.

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LLTS wrote:

- quote -

schedule d.

ChEAr$,
Harlan Lunsford, EA n LA

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Anyone have any experience with this scenerio? Client
attempted to buy a rental property (his first). Put down a
10K deposit. Financing fell through and he lost the money.
He later did buy 2 other rentals.

Any ideas on whether and where the lost deposit could be
deducted.

Thanks for your thoughts.

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