How to report 6252 installment sale income

Forum|Forum|6 years ago
March 29, 2020
8 replies
64 views

I have questioned this for years and have seen tax preparers transfer my 6252, line to many places. I have real property. i.e. single family homes that I sell on installment sale contracts. This is my buisness and this is my job if that matters. I buy homes, fix them up, sell them on land installment contract, and collect payments each year. I use the installment method for all of them.

Are my properties considered Section 1231? Where does line 26 of 6252 go? 4797, line 4 or 15, OR, Sch. D line 4 or 11? Does it depend on how long I've owned the property? One buyer on installment sale paid me off with a lump sum this year. Does anything change or do I still fill out the 6252 with the existing Gross Profit Percentage, and transfer line 26 to Sch. D or 4797 and add it to all the other installment sales I have?

Thanks for your response!

ProSeries Professional

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Best answer by itonewbie

Good to see there's still job security in this business. A call to a competent tax professional is well worth the time (and cost) before engaging in a business endeavor and structuring deals that could potentially have a material impact on taxes. Even if a transaction could otherwise be valid for tax planning, there are usually things that need to be lined up to make it work.

abctax55

Level 15

Chris - at the risk of appearing rude.... March 28 on ANY year is a bad, bad time to ask a DIYer question of tax professionals. And this year, well... my words fail me.

AND, if flipping houses is truly your business - well, I hate to be the bearer of bad news; those houses are inventory and inventory doesn't qualify for installment sale treatment.

Good luck.

HumanKind... Be Both

itonewbieAnswer

Level 15

Good to see there's still job security in this business. A call to a competent tax professional is well worth the time (and cost) before engaging in a business endeavor and structuring deals that could potentially have a material impact on taxes. Even if a transaction could otherwise be valid for tax planning, there are usually things that need to be lined up to make it work.

---------------------------------------------------------------------------------Still an AllStar