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I have a client who sold their interest in a partnership in 2021. Client has not yet received a copy of the Partnership 1065, K-1, or Form 8308, but I need to enter info to determine whether a payment is due with an extension. Below are the relevant numbers as of the date of sale:
Sales price: $365K
Partner's tax basis: $108K
Gain on Sale: $257K
At the time of Sale, the Partner's share of the following items was:
Cash: $104K
A/R: $65K
Depreciation Recapture: $1K
The Partner agreed to sell their share on the installment basis. Principal payments received in 2021 totaled $128K.
Given the above, I thought I entered the information correctly on Forms 4797 and 6252. But the results do not make sense. Do I apply the principal payments first to the "ordinary income items" from the sale before reporting any principal payments on Form 6252? If so, where are the principal payments reported for the ordinary income items?
Thanks in advance for your feedback.