Based on the K-1 presentation you described, the S Corp may have elected out of the installment sale treatment.

I would contact the accountant who prepared the S Corp return.

Would the accountant that prepared the K-1 have had to make that specific election, It sounds like the K-1 should have been completed differently to be able to establish the installment sale for my client.  Is that correct?  

Any election would have to be done at the entity level.

Installment sale treatment is mandatory unless you elect out.

If the S Corp has the sale, the treatment is determined at the S level.

Thank you!    If the accountant states he did not make the election, then how do I create the Capital Gains listed in Box 8 of the K-1 into an installment sale.   Do I just list it directly on the Disposition page?  and would I need the 4797 from the S-Corp to determine the Gross profit percentage?    

I don't want my client to get an IRS letter because he is not claiming the entire gain on his personal return.  

Thanks 

You can't. The S Corp has to treat as an installment sale. You pick up the K-1 numbers. 

You should be given the Gross Profit % to use for future years' payments.

Installment sale/gross profit % will be on Form 6252 not 4797.

I would ask for a complete copy of the 1120S and state tax returns so you can see what was done/not done. (Client may need  to ask)

Thank you so much for your help !!!