PhoebeRoberts
Level 11
Level 11

This is one where you have to kind of know where to look, and sometimes it's easier to do a dummy prior-year return and roll it over and see where everything turns up in the next year. Screenshots are from Lacerte, but ProConnect is pretty similar.

You want to set up the prior year disposition in Screen 19 Dispositions. Leave the top sections entirely blank. You want the subsection(s) for P/Y Installment (6252) and Installment Sale Principal Payments Worksheet.

Lacerte's F1 Help on the field called "Remaining unrecaptured section 1250 gain" says:

 

Remaining Unrecaptured Section 1250 Gain
Installment Sale (6252) Screen 19; Code 160


In August 2000, the IRS issued final regulations (1.453-12)on how to report unrecaptured section 1250 gain from installment sales. The general rule is that unrecaptured section 1250 gain (subject to the 25% tax rate) must be recognized before any other capital gains (subject to the 20% and 10% tax rates). This rule is applicable to all installment payments received after August 23, 2000. For installment payments received after May 6, 1997, and on or before August 23, 2000, the IRS will not challenge the recognition method used. However, if under the alternative method a lesser amount of unrecaptured section 1250 gain was recognized on each installment payment than under the general rule, the lesser amount is used to determine the balance of unrecaptured section 1250 gain to be taken into account. For installment sales before May 7, 1997, it is deemed that unrecaptured section 1250 gain had been taken into account before other gains for those payments received after the date of sale but before May 7, 1997.

Enter the remaining unrecognized balance of unrecaptured section 1250 gain. The program carries the lower of the entry in this field of the amount of gain recognized on the installment sale for the current year into the return as unrecaptured section 1250 gain subject to the 25% tax rate. If a different method for recognizing unrecaptured section 1250 was used for payments on or before August 23, 2000, use "Unrecaptured 1250 [O]" (Screen 16, code 157) to override the automatic calculation.

 

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