How do you show a refinance of a current seller financed form 6252 in general and in proseries?

[sjrcpa · Accepted solution]

Was the principal changed?

[CB777]

Yes.  There were actually two properties sold on two different installments, with gain.  Those 2 installments have been combined with a new installment sale into one loan.

[sjrcpa]

But is the principal still the same?

[CB777]

Yes, for the old loans, but they have been added to the new loan.  Are you leading me to leaving the two alone and just adding the third part on it's own 6252?

[sjrcpa]

If old loan 1 was 30K and old loan 2 was $50K and new loan is 80K the principal did not change. If so, I'd leave the 2 installment sales. Each year prorate the payments rec'd between each sale.Did both sales have the same Gross Profit %?

[CB777]

Old loan 1 had a balance of $10K.  Old loan 2 Had a balance of $15K.  New loan is $65K (10 + 15 +40).  Gross Profit is different on each loan.

[sjrcpa]

What caused the 40K increase?

[CB777]

The installment sale of an additional property

[sjrcpa]

Then leave the 2 original installment sales and add the 3rd one. Pro rate the principal payments rec'd to each of the 2 installment sales.

[CB777]

Thank you

[sjrcpa]

You're welcome.