Does anybody know if buying a house on contract is eligable for the new (up too) $8000 tax credit? I have a tenant that has been in the house for 5 years and we talked about doing the contract deal a few years ago but she didnt have the money for the down payment and couldnt get financed through a bank. Anyways i was going to bring this up again if it was available for her to access this credit and buy on contract.
If so, how would we go about doing it. And if so, Could she qualify to have it on her 2008 taxes?
IRS generally considers “contract for deed” to be a sale. Your specific mileage may vary.
The tax credit is for first-time home buyers only. This means have not owned a residence for three years.
The tax credit does not have to be repaid (unlike the 2008 “credit.”)
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
So Mark, you think it should be ok? I dont know why it wouldnt but sometimes there are stipulations taht wouldnt allow this. Also, for the married = $15,000; what if me and my g/f buy a house together. we are not married but have contemplated this. I would have to wait until August as that is when it will have been 3 years since i bought my house. But if we bought the house together, we should both be able to qualify for $7,500 each right? FYI houses we are looking at are $160,000 -$200,000
IRS generally considers “contract for deed” as a sale? Would that be the same thing as a rent-to-own? If that’s correct then coudn’t you sell your house on a RTO basis and write in the contract that the proceeds from the tax credit on next years tax returns be used as DP money when the lease term expires and the occupants go to buy the house?
Just to be clear, it does not matter when you “bought” your house. What matters is that you have not OWNED a main home in the three years prior to purchasing your new primary residence.
I have not read the language for the new $8000 tax credit, but the statute for the prior $7500 credit stipulated that the credit is shared when two or more unrelated buyers purchase a main home together. In other words, the total tax credit allowed for the purchase is a maximum of $7500 no matter how many buyers participate in the purchase.
I suspect the new legislation also has similar language that limits the total credit to $8K for two or more unrelated purchasers.