You would have had to sign papers which put a lien on the property for the interest to be deductible.
If it were something like an installment payment or land contract, yes, the interest would be allowed because in those cases, the Seller retains the right to the property until the loan is paid in full.
According to the IRS:
- The mortgage is a secured debt on a qualified home in which you have an ownership interest. Secured Debt and Qualified Home are explained later.
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