Contract For Deed / Land Contract

Would the Buyer on a CD be entitled to tax breaks, since the title doesn't transfer till all payments are made?

Thanks for your input.

Comments(3)

  • JohnMichael28th December, 2004

    In a contract for deed the seller finances the sale of the property to the buyer. The buyer makes payments to the seller rather than to a bank or mortgage company. After all of the payments are made by the buyer to the seller the title is acquired by the buyer. With a contract for deed the seller retains the legal title (legal right to the property) and is considered to have ownership interest in the property. The buyer has an equitable, but not a legal interest in the property being purchased under a contract for deed. This equitable interest gives the buyer the right of occupancy and the right to claim the property as homestead.

    The IRS considers a contract for deed just like a regular real estate purchase and the buyer if the document is properly recorded can have the tax benefits of ownership.
    [addsig]

  • kenmax28th December, 2004

    if the seller is fin. and the buyer is paying interest to the seller. the buyer can deduct the interest.......km

  • kenmax28th December, 2004

    p.s and property taxes that the buyer pays can be deducted as well.......km

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