Howdy, I’ve recently learned that a HUD-1 needs to be attached to IRS form 5405 when submitting for the tax credit on conventional sales. Can we do this on a Land Contract sale as well??? Thanks, Herbster
talking to myself again. I found my own answer, you may be interested in this.
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)
Good to know-thanks for the info!
Jake, I’ve learned no HUD-1 on a land contract but rather a settlement statement. I need to check this out but spending a half a day reading on the irs.gov site is a PITA. Thanks, Herbster
You may still be saying the same thing. For deals closed by an attorney or escrow agent or title company, the settlement statement is documented on a HUD-1 form as a general practice.
I don’t have an idea yet about your questions that is why I did my researched and found out that it is yes, the first-time home buyer credit is ten percent of the purchase price of a principal residence. The total purchase price is used to determine the amount of the first-time home buyer credit.