I ask because I just had a tenant break their lease early and I have written into my lease that they forfeit their security deposit if the lease is broken.

It does state in the lease they will forfeit last month rent and security deposit if moving out early/ lease termination.

Surprisingly, they actually did get a lawyer, who requested a mutual rescission: they would forfeit their security deposit along with the $400 due in fines and be out at the end of the month.

@Jared Hettler, if the buyer has signed a contract, there should be provisions in there with some penalties (forfeited down-payment usually) for not completely the deal. 

That way, if I need to forfeit my deposit because I want out of the contract (because my end buyer can't close), it's the end buyer's loss.And actually now that I think about it, I thought it was Justin who gave me that advice about the end-buyer contingency in the B-C contract.Also, I've spoke with about 4 title companies in my area, and none of them are willing to do a back-to-back close.

I would forfeit my earnest deposit but I think I am more comfortable losing that than waiting possibly years for values to come back.

First check your state laws regarding security deposits.If we have a tenant that trashes a property, we cannot just automatically forfeit their security deposit and we have 30 days to send the tenants an itemized list of charges against their deposit.In Texas if an owner does not follow proper procedure even though the tenant trashed the property, the tenant can go back after the owner for triple the security deposit plus attorney fees and court costs.If you accidentally did not follow your state laws, I would immediately refund the total deposit.If you followed your state laws, then you should have at least contractor invoices for the work done to justify the expenses against her security deposit.

See link below, but it basically is a forfeit of the deposit in the event of buyer's breach:http://legal-dictionary.thefreedictionary.com/Liquidated+damages

even on a standard sales contract the only thing you can do is forfeit their earnest money.Number 2.  

Does this violate any SDIRA rules as I don't want to forfeit my IRA?