Deductions & credits

Buying a home on a land contract gives the buyer equitable title (ownership), though not formal title, to the home. The Internal Revenue Service, though, gives buyers under land contracts much of the tax deduction benefits of true home ownership. For example, a land contract home buyer can deduct any property taxes she pays on her home. Also, any interest the land contract home buyer pays on her seller-carried financing is also tax deductible.