Would I have to pay capital gains on a house if the deed is only leass than a year even though I have lived there for 3 years and have been paying on a land contract

[viper15-jl]

Deed is currently not in my name but I have been paying towards fulfilling the land contract, all taxes and maintenance

[Mike9241]

yes 

The IRS looks past who holds the deed and focuses on who carries the real economic weight of ownership. The agency asks which party bears the “benefits and burdens” of the property. In almost every land contract, the buyer takes possession on day one, pays the property taxes and insurance, handles maintenance, and absorbs any drop in value. Those responsibilities are the hallmarks of ownership, so the IRS treats the buyer as the owner from the date the contract takes effect. So if subsequently sold, you pay the taxes on any gain

The previous owner, the seller, is treated as selling the property on the date of the contract and is responsible for taxes on any gain they realize plus the interest collected on the installment payments. Most likely the seller would use the installment sale method to report the sale for income tax purposes

[rjs]

@Mike9241 

If "the IRS treats the buyer as the owner from the date the [land] contract takes effect," would the IRS treat @viper15-jl as meeting the 2-year ownership requirement for the $250,000 exclusion of gain? She was on the deed for less than a year, but had the "benefits and burdens" of ownership for 3 years.