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Hi Alan, I have a client (individual) who signed a contract for purchase and for construction of an investment property in the U.S. in 2005. As part of the contract the purchase could be part financed by a mortgage. My client paid $60000 deposit. The contract clearly states if my client could not get finance the deposit would not be repaid and my client would be in default. But that was not the issue. The deposit was paid into an excrow account and the contract stated that my client waived the right to these funds and that they could be used for the build cost of the apartment. Due to weather conditions the apartment was not built and the property market collapsed in 2008 so my client requested the funds back . The seller issued a funds in escrow release authorisation document which also stated that the contract was cancelled and refunded my client only $15000. Therefore he lost $45000. Is this allowable as a capital gains loss against future gains? Regards, Paul.

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Asked on 9 April 2018 1:52 pm