We have a large down payment on a vacation condo being built, but we won’t be closing on the deal when it is complete.
This is a long shot, but is that down payment deductible as some sort of tax loss?
I’m not optimistic of it being deductible, but there is no harm in asking.
North Carolina if that makes any difference. And yes, our 2022 income is greater than the potential deduction.
Thank you!
Rob
Former RB and BL Home Fool, Supernova Portfolio Contributor & Maintenance Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.
“The whole secret of investment is to find places where it’s safe and wise to non-diversify. It’s just that simple. Diversification is for the know-nothing investor; it’s not for the professional.” Charlie Munger
This is a long shot, but is that down payment deductible as some sort of tax loss?
Nope. If you actually purchase the condo, and rent it out, rather than using it as a personal vacation home, you might be able to take a loss on the sale when you sell. But since you don’t intend to close on the condo, it’s considered a forfeited down payment. IRS Pub 530 https://www.irs.gov/pub/irs-pdf/p530.pdf specifically calls out
• Forfeited deposits, down payments, or earnest money.
Rob
Former RB and BL Home Fool, Supernova Portfolio Contributor & Maintenance Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.
“The whole secret of investment is to find places where it’s safe and wise to non-diversify. It’s just that simple. Diversification is for the know-nothing investor; it’s not for the professional.” Charlie Munger
