What do I do if buying a home contract for deed?

[JohnB5677 · Accepted solution]

You do not have to enter anything on your tax return for the purchase of any home,  it is reported when you sell or dispose of the property; however, you must keep all of the paperwork you received as documentation.

If you are purchasing a home contract for deed:

• You are not using a bank for the purchase.
• The seller is financing a loan to you.
• This seller's loan is like a mortgage, and can be deducted on your tax return if you Itemize your deductions.
• See Home Ownership Tax Deductions for more detail on including the deduction.