Land Contracts are OK for Claiming the $8000.00 Tax Credit
Many of you have asked me and evidentially the Michigan Association of Realtors legal councel has been getting this question too:
Can buyers in Michigan who buy on a land contract claim the $8000.00 tax credit?
Because the Federal Legislation is silent on the issue, Greg McClelland, our legal councel of the Mi Association of Realtors wrote an opinion on it.
If you want the entire opinion, leave me a comment here and I will email it to you.
The bottom line is “there is no rational basis for treating land contract purchases differently than mortgagors for the purpose of the credit.
The ruling is not hard to understand, hey, I even understood it. So I’ll be happy to pass it on.
Homes for Sale in Ann Arbor, and throughout Washtenaw County
May 13th, 2009 at 9:15 am
Also, yesterday it was announced in several blogs that the LENDERS can now use the $8,000 credit BEFORE the finalization of a purchase, ie: down payment or closing cost, if in fact this is true, this can be HUGE to the buying public.
May 13th, 2009 at 9:34 am
Could you e-mail me the entire opinion?
May 13th, 2009 at 9:17 pm
I’d like it…I thought Title had to pass and figured that didn’t happen until the land contract ballooned so curious about the ruling.
May 15th, 2009 at 8:27 am
WOW, did they change their minds about using the BRIDGE LOANS quickly. Shame on the government for not having all the facts before telling us we could do it.. Rescinded. GONE >> POOF.
May 18th, 2009 at 1:53 pm
Hi there my parents are on social security and i found them a land contract with no down payment the home is a doublewide 2005 on land will they qualify for this tax credit and being a land contract with zero down do they just calim this on their taxes next year to get this credit and do they have to pay it back seens it is before dec of 2009? plus with them being on social security are there any programs out there to help them?
thanks much for your time
sheri
May 20th, 2009 at 3:19 pm
I would love to have any informaton you might have that applies to land contracts and the first time home buyer tax credit…difficult to find anywhere.
thanks
May 21st, 2009 at 12:47 pm
Send me your email Missy @MissyCaulk.com and I will email it to you.
May 21st, 2009 at 12:52 pm
Sheri, when was the last time they owned a home, it has to be within 3 years. There is a form you fill out next year. If they buy in 09 they do not have to pay it back.
May 27th, 2009 at 7:48 am
Please send me entire opinion, thank you.
June 3rd, 2009 at 12:01 pm
THANKS! I justed purchased my first home on a land contract and was concerned if I would be able to claim the credit. Can you send the entire opinion? Thanks again.
June 3rd, 2009 at 6:16 pm
Our office has been contacted by a realtor/broker in Kalamazoo and we offered to present this question to our IRS liaison in Detroit. His office hadn’t received the question previously. Would you please provide a copy of your opinion so that we may forward it to the IRS for consideration and in connection with our constituent’s request? Thank you!
Ed Sackley
District Representative
Congressman Fred Upton (MI-06)
June 6th, 2009 at 8:09 am
Just emailed to you.
June 6th, 2009 at 8:10 am
Ed, I sent it to you today, Sat. June 6th.
Sorry for the delay, my blog has been neglected this week with real estate transactions.
June 11th, 2009 at 3:04 pm
Please send me a copy of the opinion
Thx.
June 16th, 2009 at 2:23 pm
Can you email me the tax credit opinion.
Thanks
June 19th, 2009 at 9:43 am
Yes it should be in your mail box.
June 20th, 2009 at 6:58 pm
Hey there,
I was just looking around on the IRS website and came across this…
Q. Does a taxpayer qualify for the first-time homebuyer credit upon the signing of a contract for deed, since normally the deeds are signed and executed but held in escrow until the provisions of the contract have been met?
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)
It was at http://www.irs.gov/newsroom/article/0,,id=206291,00.html
So it seems that a land contract won’t count? Could someone confirm this and/or provide examples of how one could structure a land contract so it did count?
Matt
June 22nd, 2009 at 1:39 am
Please send me a copy of the opinion.
June 23rd, 2009 at 8:55 am
Please send me the oponion on Land cantract & $8,000.00 from, Greg McClelland, our legal councel of the Mi Association of Realtors link. Thanks
admcleod@charter.net
June 24th, 2009 at 5:01 am
Brilliant and I would much apprecait it if you could send me a copy to. thanks Missy.
Gav
June 24th, 2009 at 2:18 pm
Matthew, I will be glad to send you the opinion of Michigan Association Legal Counsel and his reasoning.
June 24th, 2009 at 3:05 pm
will you send me the opinion on the land contract plus tax credit… we are now going this route, since we are running into walls with a rural development loan.
June 25th, 2009 at 5:38 am
IT IS NOW JUNE 25TH. WHAT IS THE ANSWER? CAN WE USE THE TAX CREDIT FOR LAND CONTRACTS, OR NOT. MORTGAGE LENDERS SAY NO. THEY SAY ONLY FHA IS ALLOWING TAX BREAK FOR DOWN PAYMENT. THANKS
June 26th, 2009 at 4:18 pm
I would love to see the full opinion on the land contract purchase and the $8000 tax credit. If you don’t mind emailing it to me, that would be great.
June 30th, 2009 at 3:35 pm
I would like the full report from McClelland. I have seen blogs from investors saying they have sold properties on land contract and had the tax credit assigned to them to increase the down payment. I would like to find out how this is done. Also if land contract does not work for tax credit, why not sell on a purchase money mortgage (deed property to buyer and take back a mortgage) It is in essence the same thing, you have to foreclose in case of default either way.
July 2nd, 2009 at 9:06 am
Gary, did you get it ? I sent to the email address here.
July 9th, 2009 at 12:49 am
Please email the entire opinion. Trying to stay as informed as possible. THANKS.
July 9th, 2009 at 4:26 pm
Ok will do.
July 10th, 2009 at 4:49 pm
Confused in Michigan, would like to know if land contract and $8,000 rebate will work together? Any information would much appreciated.
July 13th, 2009 at 3:03 pm
Yes, I would like to receive the information by email.
Thank You
July 15th, 2009 at 12:01 pm
So has anyone done a land contract , filed for the 8,000 and got it??
I live in Kentucky, does anyone know if that state accepts land contacts
as sufficient to get rebate? Please send me full information
July 24th, 2009 at 3:39 pm
Would really love to see your opinion on the $8,000 tax credit, as applied to LC’s. Thanks!
July 27th, 2009 at 3:21 pm
missy can you send me the gregs land contract 8000k opinion.
August 2nd, 2009 at 2:57 pm
I would like the opinion. i am getting ready to buy a home on a land contract.
Thanks
August 4th, 2009 at 8:19 pm
im interested in the land contract opinion, could you please email it to me?
August 9th, 2009 at 2:07 pm
Could you please forward the entire article regarding the $8,000 credit. We’re looking to do a land contract.
Thank you,
Dianna
August 12th, 2009 at 2:43 pm
would love to receive more info! thank you!
August 15th, 2009 at 9:56 am
Can you please email me the article about the tax credit and land contracts? Thnaks!
August 21st, 2009 at 8:38 pm
Could you please send me the entire article with your opinion?? I have gotten conflicting information on the issue
August 24th, 2009 at 7:59 am
Please send me the report, thanks
August 24th, 2009 at 8:20 pm
could you please send me the article. Thanks
August 26th, 2009 at 7:43 pm
Land contracts are acceptable and will allow you to claim the $8000 tax credit with some provisions. Here are the relevant links.
http://www.federalhousingtaxcredit.com/2009/faq.php#3 http://www.irs.gov/newsroom/article/0,,id=206291,00.html
September 9th, 2009 at 1:06 am
Can you please send me the entire article with your opinion? Thanks
September 16th, 2009 at 10:02 pm
I emailed it, did you get it?
September 17th, 2009 at 10:27 pm
I agree with your comment
September 19th, 2009 at 11:01 am
Please email me the entire opinion. Thank you.
September 23rd, 2009 at 7:22 pm
Have these people been able to get the credit? Will you please e-mail me the entire opinion. Thank you
September 25th, 2009 at 9:03 pm
Please email me the entire opinion…Thanks so much!
October 1st, 2009 at 12:18 am
Could you please send me the info too? I am buying a house on land contract within the next month and would appreciate the extra info. Thanks..
October 11th, 2009 at 1:14 pm
A contract for Deed may received the Tax Credit and here is the copy and paste from the IRS website:
http://www.irs.gov/newsroom/article/0,,id=206291,00.html
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)
October 13th, 2009 at 8:02 am
Yes same here in MIchigan. Thanks!
October 20th, 2009 at 7:58 am
I will love to have the full print out about land contract and tax credit. About to sell on land contract and didn’t know if they would qualify.
October 20th, 2009 at 9:00 am
I emailed it to you.
October 21st, 2009 at 1:31 pm
please send me your opinion. I am closing on a land contract in 10 days and was told that it does qualify for the tax credit because it will be a recorded land contract and i am not buying it from a relative.
October 25th, 2009 at 1:18 pm
I would love to see what the full opinion says. I live in Nebraska and signed a land contract and have been getting mixed results also. Would be much appreciated!
October 31st, 2009 at 8:49 am
Can you please send me this particular article, on the land contract and allowing me to qualify for 8,000 tax credit ……. I live in Nebraska for the record, thank you in advance .
November 2nd, 2009 at 6:25 am
I too would like the opinion given on this or any other updated material on LCs. What documentation besides form 5405 is required? There is no HUD with a land contract. Is the govt taking people at their word??? Also can the tax credit be assigned to me as a seller to be used as down payment?
November 3rd, 2009 at 2:25 pm
please send me info on the tax credit for new home buyer on land contract. thank you.
November 11th, 2009 at 5:15 pm
I am negotiating a land contract right now. Is there a definite “yes” or “no” on the 1st time homebuyer’s credit for a land contract agreement. Would you please send me your article.
November 12th, 2009 at 8:01 am
Diane, I sent it to you.
November 12th, 2009 at 2:40 pm
Would love the information. I will be selling my home on land contract next month. The buyers want to use the credit for down payment if possible.
Thank you!
November 30th, 2009 at 8:36 pm
I believe that land contracts, if writtten properly qualify for the tax credit….I’d like a copy of the article or opinion of your legal councel…thanks
December 3rd, 2009 at 12:47 pm
We are looking into buying a land contract here in Mich. I am new to all this info. He(seller)wants us to just make the payments to his mortgage. What would we have to do to get this tax credit? The house needs some work and this would really help.
Thanks a bunch!
December 4th, 2009 at 6:33 pm
I would love to think creatively in this economy and our government has assisted us in this notion. The IRS has shared the good news that owner financed arrangements will be rewarded for those with wounded credit by allowing this arrangement to be included in the tax credit group. Congress has done its part to encourage wannabe homeowners that are often young people with credit mistakes…
I would like to do my part by entering into an owner finance with a fabulous young couple; however, WELLS FARGO MORTAGAGE COMPANY has informed me that they will excersice the Due-on-Sale clause if I do this… meaning I cannot owner finance these young buyers or WELLS FARGO will call the loan due..
SHAME ON YOU WELLS FARGO for counteracting everything the government and our people are tyring to do for each other in these trying times!!!
December 8th, 2009 at 9:47 pm
I also entered into a land contract and would like to know if I qualify for the credit. Please email the article.
I sent it Ryan. Hope it helps.
December 9th, 2009 at 8:47 pm
Missy, we bought on land contract in August of ‘08 it was a 2 year buyout and would come up in August of ‘10. If we purchased before August, we it be eligible for the credit? Please send article.
December 10th, 2009 at 4:59 pm
Could you please e-mail me the article..
December 11th, 2009 at 12:06 pm
I purchased a home on a land contract on October 31, 2008. The home I lived in before that was foreclosed on January 2, 2008. I lived in that house for 9 years. Do I qualify for the $6500 tax credit? What dates, years does it include?
Please send me a reply.
Thanks,
Jenny
December 12th, 2009 at 7:20 am
http://www.federalhousingtaxcredit.com/faq2.php
December 12th, 2009 at 7:28 am
Emailed it Paul.
December 12th, 2009 at 3:16 pm
My wife and I own a few homes and are selling them through land contract and I would like to know about the tax credit informaiton so I can pass it on to my potential buyers.
December 14th, 2009 at 12:19 am
Missy could you please email me the entire opinion. Thank you.
December 15th, 2009 at 10:10 pm
We are looking into buying some Detroit properties, and have been told that land contracts might be a way to go. Please send your complete opinion on this. Thank you.
December 20th, 2009 at 3:23 pm
Again 125% mortgages – idiots in banks body did not learn a lesson.
December 21st, 2009 at 10:26 am
could you send me a copy of what you have so I can look it over? Thanks so much!
December 21st, 2009 at 12:25 pm
Please send me a copy of the full opininion. I have a tenenat who approach me on this issue. Did any of your bloggers who actually did a land contract for their tenants? please share your experiences. Thank you
December 29th, 2009 at 8:06 am
I am going to sign a land contract next month, and would like to read this opinion.
January 6th, 2010 at 2:32 pm
Could you please email the opinion to me? Thanks!
January 6th, 2010 at 2:53 pm
Missy could you please send me what you have. I signed a land contract back in November and would like to also see what I need to do to get the $8000
January 8th, 2010 at 1:23 pm
Missy could you please send me what you have. I signed a land contract back in April 2009 and would like to see what I need to do to get the $8000
January 11th, 2010 at 11:28 am
Missy hi could you send me all the infor u have on land contract and also where i could find a land contract home if you know.
January 25th, 2010 at 9:44 am
Please e-mail the opinion to me. Thanks.
January 25th, 2010 at 11:00 am
hiya Missy,
Me and my wife entered into a land contract, early 2009 …
only the contract owner – is my father, as i have a less than par credit score. might i be able to claim this?
Also, could you send me the same michigan opinion also?
Any additional information would be greatly appreciated also. thanks alot,
drew
January 29th, 2010 at 3:42 pm
My son is planing on purchasing a home from his inlaws on land contract. Will they qualify for the tax credit.
Thank you in advance for you time.
Sue
I am afraid not it has to be arms length.
January 29th, 2010 at 4:33 pm
Could you please email me the opinion from Mr McClelland.
Thank you
January 29th, 2010 at 4:35 pm
No it needs to be an arms length transaction.
February 1st, 2010 at 8:06 pm
Can u email me the opinion and concerns about what paperwork to send with my return? thx in advance
February 2nd, 2010 at 3:08 am
Please forward me a copy of the information that you have received regarding the land contract tax credit break. Thank you for your assistance!
Justin
February 2nd, 2010 at 4:03 pm
Sent
February 2nd, 2010 at 4:57 pm
I’d be interested in receiving the opinion, too.
February 3rd, 2010 at 1:03 pm
I would like a copy of that attorney’s opinion on land contracts.
Regards,
John
February 4th, 2010 at 6:57 pm
I would like a copy of the attorney’s opinion on land contracts. Mine was entered into 4 years ago, but title is retained by the mortgage issuer until completion in 2009. I was considering that since title hasn’t changed and no foreclosure would be necessary to repossess, then this is a rental with option to purchase at completion.
February 4th, 2010 at 7:42 pm
I will send the opinion. If you are in Michigan then a land contract is a valid sale. My suggestion is to speak to an Accountant or IRS.
February 4th, 2010 at 7:53 pm
John, I emailed you.
February 7th, 2010 at 8:17 pm
Please send me a copy of the option we are getting ready to do a land contract and this would be helpful. Thank you.
February 8th, 2010 at 9:57 am
Please send me opinion.
I’m frustrated because I can see I should qualify for the credit but because I will be doing a land contract from a close relative, I will not get it, even when I will have “all the burdons on ownership”
February 12th, 2010 at 4:02 pm
Hi Missy Caulk,
I am very interested in receiving the entire opinion on the $8,000 tax credit for a land contract sale. I am a CPA in NJ and have a client in Michigan who is the process of a land contract and wanted to know if it qualified for the $8,000 tax credit. I also thought that this type of sale would qualify.
Diane Radosti
February 13th, 2010 at 10:10 am
I will email to you.
February 15th, 2010 at 11:35 pm
I am interested in receiving the opinion.
We live in Michigan and are looking to make an offer on a land contract and close in the new few months. This would be our second home the first is in the forecloser process we have lived in this home for over the 5 year requirement. Thanks for your opinion.
February 16th, 2010 at 3:46 pm
If I buy a house in a land contract am I eligible for 8,000 tax credit?
February 16th, 2010 at 3:51 pm
I sent you the opinion of the Michigan Association of Realtors Legal Counsel
March 2nd, 2010 at 3:39 pm
Please forward the opinion Greg issued on land contracts and tax credits. Thankyou jim
March 6th, 2010 at 10:47 am
I would like a copy of the opinion on land contracts and tax credits.
thanks.
March 8th, 2010 at 9:14 am
I sent it, did you not get it?
March 9th, 2010 at 4:56 pm
I would like a copy of the opinion on land contracts and tax credits. please.
March 10th, 2010 at 7:48 am
Katie I emailed it to you this morning.
March 10th, 2010 at 3:37 pm
I would like a copy of the opinion on land contracts and tax credits, please.
March 12th, 2010 at 7:08 am
Please email comments you reply on land contracts and the tax credit.
March 12th, 2010 at 7:09 am
Please email your comments on the land contract tax credit scenario.
March 12th, 2010 at 1:03 pm
I am building a home. Been in the process of getting the loan for about 4 months. We hope to break ground befor the biggining of April. However, I am not sure the will have an Ocupancy Certificate by june 30. The IRS has told me that all I need is the occupancy permit for new home contruction. Do you know if that is true?
March 12th, 2010 at 7:43 pm
Would you be so kind as to send me a copy of the opinion. We would like to sell our home on land contract and need to know if it works for the tax credit
Thanks
March 13th, 2010 at 3:48 pm
Are you doing a Construction loan and then another loan after you finish the house?
Or is it a one time closing with a HUD?
I would ask an attorney as having a final C of O has never meant you couldn’t close on a house.
March 13th, 2010 at 4:16 pm
Done.
March 14th, 2010 at 10:16 am
I did Mark, did you not get it?
March 14th, 2010 at 10:31 am
My husband and I purchased a lot in August 2009, with the stipulation that we would build our home within three years. Do we qualify for the $8,000.00 tax credit? Our CPA said we donot qualify? Is he incorrect? We are now in the process of building our home and is due to be completed in Dec. 2010. Thank you, Pat & Ed Harris
March 14th, 2010 at 10:35 am
By the way, we live in Maryland. Ed & Pat Harris
March 15th, 2010 at 6:59 am
I don’t know you should speak with a Real Estate Attorney in Maryland. Every state is different in how they view land contracts. Or contact your Congressman.
March 15th, 2010 at 11:55 am
Could you please send me the opinion also? Thanks!
March 17th, 2010 at 10:54 am
Just sent it Barb, thanks for stopping by.
March 21st, 2010 at 8:36 am
I filed for the 8000.00 tax credit and the IRS says I need a closing statement. (I don’t have one since I have a land contract. We signed a contract for the home and it is in our name) Please help.
March 21st, 2010 at 9:00 am
Send them a copy of the land contract. Did you not file it with a title company?
It should have been a recorded land contract and the title company should have one.