The deductions available to you will depend on the details of your land contract.
You are most likely paying interest on the contract, which is deductible if you used itemized deductions. This will be reported as mortgage interest on Schedule A. In order to claim this deduction, you will need the following information from the seller:
- Name
- Address
- Social security number or taxpayer identification number
The amount of interest paid can be obtained by contacting the seller or reviewing any amortization schedules included with your land contract.
Additionally, if you pay the real estate taxes on the property, these are also available to deduct if you itemize.
To enter this information, you will want to indicate that you own a home when asked in the interview. After you have indicated that you own a home, you will be asked the appropriate questions as a part of the interview process. If you have already started your return, you will need to do the following:
- Click on "Take me to my return"
- Click on "Federal taxes" at the top of the screen
- Click on "Deductions & Credits" at the top of the white box in the screen
- A screen will appear that says "Let's dig into your tax breaks" - click "Continue"
- It may ask you if certain situations apply - check any that do and continue
- On the screen that says "Let's check for tax breaks", you may choose either "Guide me" or "Jump to full list". You will choose one of these, but you can switch to the other one at any time if you need to.
- From there, you will be guided through the process to enter the information about your expenses.
It is possible that, even with these expenses, your itemized deductions will be less than the standard deduction. If so, you are not allowed to take additional deductions (on top of the standard deduction) for these expenses on your federal income tax return. They may, however, be deductible on your state income tax return.
Note - If you did not claim expenses on your prior years' returns, you are able to amend 2013, 2014, and 2015 returns. If you used a desktop version of TurboTax software for your 2015 returns, you will be able to prepare your amended return from that software. If you used TurboTax online (Deluxe version or higher), you will be able to get the download at no additional charge with your .tax file from that year.
