All Forum Posts by: William Deutchman

I disagree with the previous postings. I am a CPA with a specialty of real estate. Checkout my blog on this topic at [REMOVED]. I also posted this to the Tax and Legal Forum on this site.

I think that you qualify. Let me know if you want my advice.

Bill

Did you buy a home after April 8, 2008? If so, and it is your personal residence and you haven't bought a home in the previous 36 months, you probably qualify for a large tax credit. If you bought a home in 2009 and you qualify, you can even claim the credit on your 2008 tax returns.

Even if you already filed your 2008 return, your return can be amended and you can get a refund of up to $8,000.00. I know it sounds too good to be true, but this is the federal government's way to stimulate the housing market that has been in a slump in recent years. This incentive is part of the recently enacted Housing and Economic Recovery Act of 2008.

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I am a CPA and I specialize in working with real estate investors. The method for reporting this transaction by an investor, not a dealer, is the installment sale method.

In the year of sale, a percentage of profit, or gain, is determined. Then, that percentage is multiplied by the amount of principal that is received each year. In the year of sale, that is the total of the downpayment and the principal portion of the land contract payments.

The interest portion of the land contract payments is reported as interest income, as stated in the previous reply.

Doug, I hope that this is helpful to you.

Regards,
Bill

William Deutchman, CPA
Cleveland, Ohio