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If you own a home contract for deed, can you claim it on your taxes as a homeowner?
I am considering asking my landlord to do a contract for deed for the home I rent. He originally had it for sale by owner and then decided to rent it because it wasn't selling. We didn't think we would stay in the area but now are having a change of heart. Our credit is bad so we would have difficulty getting a conventional loan. We have done a lot of improvements to the property and continue to do so. I hate that we wouldn't benefit from the enhancements we have made and would like to. What would be the best way to approach the owner to consider this as a selling option. We have always paid him on time and will continue to do so. Thanks for any ideas, etc.
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Hello m: The farthest thing from your mind is how to do your taxes IF you can make a deal... Making the deal should be first and foremost... I'd try a lease option first... It would be a better deal for you, and works about the same as a land contract... The difference is that at some predetermined time in the future, you WILL buy the house. In a land contract, you actually won't BUY the house until the END of your contract. In a lease option, your landlord takes a portion of your rent and attributes it to a down payment... When that account is built up enough, he SELLS you the house and takes a mortgage. THAT would be ideal for you. excon |
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To answer the question posed in the title of this thread: you can deduct mortgage interest IF the home is your primary or secondary residence and if the mortgage is a secured debt. From IRS Pub 936: You can deduct your home mortgage interest only if your mortgage is a secured debt. A secured debt is one in which you sign an instrument (such as a mortgage, deed of trust, or land contract) that: - Makes your ownership in a qualified home security for payment of the debt, - Provides, in case of default, that your home could satisfy the debt, and - Is recorded or is otherwise perfected under any state or local law that applies. You can also deduct the real estate taxes that you pay. |
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