I bought a house on land contract the property tax bill comes in both mine and the land contract holders name?

Is the IRS going to make me split my first time home buyers credit with them. I sent them a copy of my tax bill as part of my proof of owner ship along with a signed contract, bank statement and copy of my Drivers License with my new address on it. My friends are telling me that the IRS will consider them as part owner and they will be entitled to part of my credit. Is this true?

The IRS has been very vague on this issue. They seem to be saying that you can divide the FTHB credit any way that makes sense. In your case you bought the house from the other person on the tax bill. Therefore they are like the mortgage holder. I would have applied for 100% of the credit had I done the return. I have done a good number of these split ownership returns and never had one come back yet. The only time there is a problem is if folks take more than 100% of the credit on one home.

Yelp

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All legal owners of any property are entitled to any and all money and bills due or money received connected with the property and

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not any business on stated property unless other wise in contract stating so

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Either you own the house or you don't.

The RIS is going to review the contract and determine if *you* meet the tests of ownership. If you do, it's your credit. If not, you get $0 for the credit.

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. (7/2/09)