According to the Tax Court in 2018, it depends on whether the real estate was used in a trade or business.

Under Sec. 1234A(1), a taxpayer's gain or loss from the cancellation, lapse, expiration, or other termination of a right or obligation with respect to property will be a capital gain or loss if the property is a capital asset of the taxpayer. Capital assets do not include real property used in a trade or business. 

https://www.journalofaccountancy.com/issues/2016/dec/forfeited-deposits-are-ordinary-income.html