1).  ok... you will just NOT LINK that part to the 6252..will just show up on the 4797... you can't have a 'loss' as any part of an installment 'gain' Should not impact the sales amounts on any of the other assets..

2) of Course it increases the ordinary income to the shareholder... recapture of the deprecation taken on the asset IS ordinary income... just like the depreciation expense when taken, reduced ordinary income.  You only get capital gain treatment for the part of  the sales price that is greater than the original purchase price.   If they sold the items for less than the original purchase price...the amount of installment income EACH year will be ordinary income!!

3. I'll have to think on that....