Do land contracts qualify for $8000 tax credit?

[Anthony Polk]

From the definitions of who/what qualifies a purchaser/purchase for the highly touted $8000 tax credit, it appears that a change in title (to the buyer's name) is what constitutes the "qualifying event". Of course this assumes the prospective buyer also meets the other qualifying criteria of being a first time homeowner, not buying from a relative, et cetera.

If the change in title (ownership on deed) is the actual "qualifying event", then it would follow that a land contract or contract for deed would be a qualifying event. I have been unable to determine from www.federalhousingtaxcredit.com, the IRS's site, or any other sites/blogs whether this is actually the case. Does anyone know?

[Herb V.]

Anthony this may help. The buyer must attach a irs form 5405 and the Hud-1 and 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)
Herbster