The question which arises in this context is whether a vendor who forfeits a deposit under a validly terminated contract for the sale of a principal place of residence, or who sues to recover an unpaid deposit and damages for breach of contracts, is liable for capital gains tax on the amount of the forfeited deposit.
Above is an extract from a text book. It is explaining the tax implications when deposit is forfeited to a vendor. The vendor does not pay deposit, the purchaser does.
In the dictionary the word forfeit is defined as "to lose something or have something taken away from you because you have done something wrong."
However, in the above sentence the word forfeit is used as to mean seize or take, an exact opposite of the meaning shown in the dictionary.
Is the above usage correct?
Best Answer
Only after reading the quote three times did I become sure that you are right, because who forfeits a deposit absolutely does not mean who receives a forfeited deposit to me.
Either this is a very special use in the world of finance or law, or it is plain wrong. If the former, then as you say, it is a use directly contrary to the general meaning of the word.
Edit: TRomano has convinced me that this answer is wrong, and that forfeit can have its normal meaning here. What is then confusing about the quotation is that it is linking together two very different circumstances: one where the vendor temporarily holds the deposit and then forfeits it (loses it) and the other where the vendor never received the deposit in the first place, but sues to obtain it. Bringing these two, almost opposite, cases in the same condition is what makes it hard to interpret forfeit in its usual meaning.