I deposited $15,000 with a builder to construct a new home for me, but lost it when I couldn't sell my old home and didn't go through with the construction. Can I deduct the deposit I lost?

I deposited $15,000 with a builder to construct a new home for me, but lost it when I couldn't sell my old home and didn't go through with the construction. Can I deduct the deposit I lost?

Unfortunately, you can't deduct the lost deposit. It relates to the purchase of a personal asset (a home) and losses on personal assets are not deductible in most cases. If the deposit had been lost because a builder did not perform as required, then it could have been written off as a nonbusiness bad debt.