Discussion:First Time Homebuyers Credit land contract
From TaxAlmanac
Discussion Forum Index --> Basic Tax Questions --> First Time Homebuyers Credit land contract
Discussion Forum Index --> Tax Questions --> First Time Homebuyers Credit land contract
Karianderson1999 (talk|edits) said: | 13 April 2009 |
| I have a client that is buying a house on land contract - moving in this summer but final payment won't be for several years. Any idea if this individual would qualify for the credit?
Thanks for the help. | |
| April 13, 2009 | |
| This will not qualify. We call these contract for deed and I absolutely hate them. Client won't take ownership until that last payment is made, so they haven't bought anything in current year. | |
| 29 June 2009 | |
| FYI, new Q&A added to the IRS FTHB FAQs on June 12 (Note - was revised significantly July 2, see post below):
A. Generally, no. A taxpayer is not eligible for the first-time homebuyer credit unless there is a completed sale. Under the facts presented, the contract for deed may not be a completed sale because all of the provisions of the contract have not been met. However, the determination of whether there is a completed sale would depend on the facts and circumstance of the particular case and perhaps state law. (New 06/12/09)" New update: "Q. Can a taxpayer claim the first-time homebuyer credit if the purchase is pursuant to a seller financing arrangement (for example, a contract for deed, installment land sale contract, or long-term land contract), and the seller retains legal title to secure the taxpayer's payment obligations? A. If the taxpayer obtains the "benefits and burdens" of ownership of a residence in a seller financing arrangement, then the taxpayer can claim the credit even though the seller retains legal title. Factors that indicate that a taxpayer has the benefits and burdens of ownership include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property. (New 7/2/09)" Thx to Solomon for pointing out the revised update on another discussion! | |
NOTICE to readers:
This discussion has been locked, as the long user name of the original poster will negatively affect the formatting of the tax forum columns on the front page, if any new reply is added.
For Kari: there's info on your talk page about changing your name so that your discussions won't distort the discussion index page. Also, if you need this discussion unlocked to post a follow-up question (with your new, shorter ID), please contact Trillium or Kevinh5.
For all: If you have a follow-up question or comment, please click on the "First-time homebuyer credit" category link at the very bottom of the page and review the info there, and if there's a need to ask a new question after that, please add your question to another appropriate FTHB discussion instead. Attempting to post using the "reply" box below will result in a generic error message. Thank you.
