How to generate Form 6252 for a current year installment sale in Lacerte

If Form 6252 doesn't generate after completing the entries, look for the following diagnostic:

• Depreciation asset #X: Entries have been made indicating that this asset was sold on the installment sale basis. There is no gain from this sale, so the program has generated a Worksheet Form 6252 showing the calculation of the installment sale through line 14. In order to prevent any potential errors, remove the entries associated with the installment sale. (ref. #2010888)"

Table of contents:

To enter a current year installment sale on the depreciation screen:

1. Go to the Depreciation screen:
   • Individual module: Screen 22
   • Partnership module: Screen 14
   • Corporate module: Screen 21
   • S-Corporate module: Screen 16
   • Fiduciary module: Screen 27
2. Enter the following applicable information in the Asset Information section:
   • Description of property
   • Form
   • Activity name or number
   • Category (for example, 1= Automobiles/Transportation Equipment, 2= Furniture and Fixtures, 3= Machinery and Equipment)
   • Date placed in service
   • Cost or Basis
   • Method
   • Prior depreciation
3. Scroll down to the General Disposition Information section.
4. Enter the Date sold or disposed of (negative date= various) (MANDATORY).
5. Scroll down to the Sale of Asset (4797/6252) section.
6. Enter an amount or -1 in Sales Price (-1=none) under the Form 4797 subsection.
7. Enter an amount or -1 in Principal payments (-1=none) under the Form 6252 subsection.
8. Complete any other necessary entries.
   • If the installment sale consists of a group of assets or a bulk sale, complete this information in the main asset only.
   • The remaining assets in the group require only the Date Sold or Disposed of (negative date=various) (MANDATORY) and Bulk sale (multi-asset) disposition: select the asset containing disposition amounts (in the General Disposition Information section).

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To enter a current year installment sale on the dispositions screen:

1. Go to the Dispositions screen:
   • Individual module: Screen 17
   • Partnership module: Screen 19
   • Corporate module: Screen 23
   • S-Corporate module: Screen 16
   • Fiduciary module: Screen 22
2. Enter the asset information in the Dispositions (Schedule D, 4797, etc.) section:
   • Description of property
   • Date acquired
   • Date sold
   • Sales price
   • Expense of sale (if applicable)
   • Cost or basis
3. Scroll down to the Form 4797 section.
4. Enter the Depreciation allowed (-1=none, triggers 4797) if applicable.
5. Scroll down to the Current Year Installment Sale (6252) section.
6. Enter an amount or -1 in Current year principal payments.
7. Complete any other necessary entries.

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To enter disposition of installment sale propery

Perform the following steps if the asset is already entered in Screen 22, Depreciation.

1. Go to Screen 22, Depreciation.
2. Select the Asset.
3. Scroll down to the General Disposition section.
4. Enter the date sold in Date sold, disposed, or retired (MANDATORY).
5. Scroll down to the Sale of Asset section.
6. Enter the Sales price in Sales price.
7. Still under the Sale of Asset section, you should see Form 6252.
8. Enter the Existing mortgage if applicable in, Existing mortgage (loan) assumed.
9. Enter the payments received this year in, Principal Payments (-1=none, triggers 6252).

Perform the following steps if the asset is NOT already entered in Screen 22, Depreciation.

1. Go to Screen 17, Dispositions.
2. If current year installment sale, enter the appropriate Description, Date Acquired, Date Sold, Sales Price, Cost or Basis, and Expense of Sale.
3. Select Current Year Installment Sale in the Section box on the left side of the screen.
4. Enter applicable current year installment sale information.
5. If prior year installment sale, select Prior Year Installment Sale in the Section box on the left side of the screen.
6. Enter applicable prior year installment sale information.
7. Select the Add button in the Disposition box on the left side of the screen.
8. Enter the appropriate Description, Date Acquired, Date Sold, Sales Price, Cost or Basis, and Expense of Sale for the property being disposed.
9. If Form 4797 is required, select Form 4797 in the Section box on the left side of the screen.
10. Enter the appropriate amount or -1 in the field, Depreciation allowed (-1=none, triggers 4797).

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Reasons the Form 6252 isn't generating after entries are made:

• The asset (or one of the assets sold in a bulk sale) in an installment sale has prior section 179 entered (Partnership/S Corporate). If there is prior section 179 taken, the sale won't flow to Form 6252; instead, the sale flows to Schedule K-1.
• The gain from this disposition is entirely a recapture of depreciation to be reported as ordinary income. Per the Form 6252 instructions:
  • "Line 12: Any ordinary income recapture under section 1245 or 1250 (including sections 179 and 291) is fully taxable in the year of sale even if no payments were received. To figure the recapture amount, complete Form 4797, Part III. The ordinary income recapture is the amount on line 31 of Form 4797. Enter it on line 12 of Form 6252 and also on line 13 of Form 4797. Do not enter any gain for this property on line 32 of Form 4797. If you used Form 4797 only to figure the recapture amount on line 12 of Form 6252, enter N/A on line 32 of Form 4797. Partnerships and S corporations and their partners and shareholders, see the Instructions for Form 4797."
• There's no gain from the sale. If there's no gain, then Form 6252 won't generate. Per the 6252 form instructions:
  • "Line 14: Do not file Form 6252 if line 14 is zero or less. Instead report the entire sale on Form 4797, Form 8948, or the Schedule D for your tax return."

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