Home Purchased in 1993 Does Not Qualify For First-Time Homebuyer Credit in 2008.

The petitioner bought a home via a land contract in 1993 for $27,500.  The contract specified that the seller would transfer the property to the purchaser on full performance of the contract, and required a $1,000 downpayment with $223.39 to be paid monthly over a five-year term which was renewable.  Interest was set at 9 percent.  The five-year term was renewable and the petitioner did renew the contract twice.  Upon the expiration of the third five-year term, the petitioner borrowed money from a third party lender and paid off the contract in 2008.  The petitioner claimed a first-time homebuyer credit (FTHBC) in 2008 worth $2,609.  The IRS denied the credit and the court agreed.  The court noted that under state (WI) law, the petitioner became the equitable owner of the house at the time the contract was entered into in 1993 because she bore the benefits and burdens of ownership at that time - a prerequisite for the FTHBC.  The petitioner had been paying, in accordance with the contract, the real property taxes, assessments and insurance.  The petitioner also bore the risk of loss, and had the right to obtain legal title at any time by paying off the then-existing balance of the contract.  Wodack v. Comr., T.C. Memo. 2014-254.

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