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Level 1

Categorizing a seller who received forfeited earnest money

What do I categorize an earnest money payment that was forfeited to a seller? They are not really a vendor or customer.

3 Comments
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Level 6

Categorizing a seller who received forfeited earnest money

Hi,

Welcome to the community.

Need a few more details on what this earnest money was for, how it was forfieted and so on. But generally in QuickBooks earnest money is accounted for as suggested below -

https://community.intuit.com/questions/1385551-how-to-make-journal-entry-for-earnest-money-deposit

 

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Level 1

Categorizing a seller who received forfeited earnest money

So buyer puts earnest money down on the house, and when the buyer defaults the earnest money deposit will typically be forfeited to the seller. I took the money in from buyer but check will be cut to seller because buyer defaulted on contract. 

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Level 6

Categorizing a seller who received forfeited earnest money

Hi,

The link that I posted in my previous reply will give you the solution. Also you need to deduct your fees from the same.

The following link could give you a better insight on how earnest money should be accounted for -

https://community.intuit.com/questions/777256

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