[ap72403]

I was in a land contract for 2 years, at which point, under contract, I was supposed to secure financing or the land contract was over. My husband and I couldn't get financed for that house, so we bought a different house. And we signed a quitclaim deed to transfer everything back to the owner on the land contracted house. When we originally got into the land contract, the realtor told us that we were supposed to claim the mortgage interest when we do our taxes, so on our 2008 taxes, we did.
We bought the next house (our current house) in August 2009 - not under land contract obviously.
Now I'm confused as to whether we can claim the first-time homebuyers credit? We never actually owned the house that was under land contract... but did we have interest or principal in it? And I THINK the quitclaim deed released any interest or principal we had in it, if we ever had any in it, right?
I'm so confused, and I'm about to go get my taxes done and I NEED an answer to this! Ugh! Please help!

[Fr_Chuck]

I am sorry, why did you have a "deed" to the first house, on a land contract there is no quitclaim deeds done when you get the contract or when you leave it .

So if there were deeds, it was not a real contract for deed.

Next no, normally you don't take the interest on a contract for deed, since it is not a mortgage. it is merely a contract.

You were not suppose to do any deed back to them, unless they had given you a deed at first.

There are so many things wrong with this contract and the way you did this, it is just a mess. You need a tax accountant, perhaps a tax attorney and maybe even a real estate attorney, since that entire contract issue may have had you file incorrect in prior years, and you may have to refile those years with corrections.

[ap72403]

Well either you don't get what I was saying or the lawyers, title agencies, and realtors around here don't know what they are doing, haha! I entered into a land contract, which was signed at a title office... it was a formal procedure... signing the papers, paying the lawyer fees, handing over of the keys... all that. I had to secure a loan before 25 months. My realtor (a dual agent in the deal) told me that I was supposed to claim mortgage interest when I do my taxes. So we claimed it when we did our 2008 taxes. I couldn't get a loan for that amount, and didn't have enough cash to cover the difference, so he got a lawyer because he didn't know what to do. His lawyer wrote up a quitclaim deed for us to sign because he couldn't put the house back on the market until we did. So obviously we signed it.

Right after that we bought a house elsewhere with a conventional loan. And I'm curious as to whether I can file for the First time homebuyers credit when I do my taxes. Because I'm not quite sure whether we had any interest or principal in the land contracted house.

[Fr_Chuck]

Let me see, I am a licensed real estate agent and have bought and sold on contract for deeds over at least 50 houses in at least 10 states, and all I can say is something is "fishy" bigtime.

Since you never owned the home, he could even sell the home while you were buying it, as long as the new owner honored the contract.
The deed was or never should have been in your name. So if the deed was still in the sellers name, for you to "deed" something you don't own, is not the proper procedure.

If you were claiming interest on buying a home, it will trigger the IRS that you owned a house before.

You legally on actual contract for deed, have no interst or principal in the home that has a contract, but them making you sign a quitclaim deed, states you did.

May I assume you did not have your own attorney representing you on the buy ?

I would say from the way they had you doing it, that it will not be accepted if you try.