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I am a partner in a newly formed commercial real estate partnership (very small business). Can anyone tell me if the "earnest money" deposit for a commercial real estate purchase is a deductible expense ? I am preparing a partnership Form 1065 for 1999 and this is a sticking point. Thank you.
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No. of Recommendations: 0
I am a partner in a newly formed commercial real estate partnership (very small business). Can anyone tell me if the "earnest money" deposit for a commercial real estate purchase is a deductible expense ? I am preparing a partnership Form 1065 for 1999 and this is a sticking point. Thank you.
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No - it would be listed as a "other asset" on the balance sheet of the Pship.

If the sale is consummated the deposit would roll into the cost basis of the property purchased.


Pete
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