IRS Form 6252 2017 Installment Sale Income

IRS Form 6252 or the "Installment Sale Income" is a form issued by the U.S. Department of the Treasury - Internal Revenue Service.

A PDF of the latest IRS Form 6252 can be downloaded below or found on the U.S. Department of the Treasury - Internal Revenue Service Forms and Publications website.

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6252
Installment Sale Income
OMB No. 1545-0228
2017
Form
Attach to your tax return.
Use a separate form for each sale or other disposition of property on the installment method.
Department of the Treasury
Attachment
79
Go to www.irs.gov/Form6252 for the latest information.
Internal Revenue Service
Sequence No.
Name(s) shown on return
Identifying number
Description of property
1
2 a Date acquired (mm/dd/yyyy)
b Date sold (mm/dd/yyyy)
3
Was the property sold to a related party (see instructions) after May 14, 1980? If “No,” skip line 4 .
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Yes
No
4
Was the property you sold to a related party a marketable security? If “Yes,” complete Part III. If “No,”
complete Part III for the year of sale and the 2 years after the year of sale .
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Yes
No
Part I
Gross Profit and Contract Price. Complete this part for the year of sale only.
5
Selling price including mortgages and other debts. Don’t include interest, whether stated or unstated
5
6
Mortgages, debts, and other liabilities the buyer assumed or took the
property subject to (see instructions) .
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Subtract line 6 from line 5 . .
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8
Cost or other basis of property sold .
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8
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Depreciation allowed or allowable .
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9
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Adjusted basis. Subtract line 9 from line 8 .
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10
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Commissions and other expenses of sale
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Income recapture from Form 4797, Part III (see instructions) .
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Add lines 10, 11, and 12 .
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14
Subtract line 13 from line 5. If zero or less, don’t complete the rest of this form (see instructions) .
14
If the property described on line 1 above was your main home, enter the amount of your excluded
15
gain (see instructions). Otherwise, enter -0- .
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15
16
Gross profit. Subtract line 15 from line 14 .
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Subtract line 13 from line 6. If zero or less, enter -0- .
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18
Contract price. Add line 7 and line 17
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18
Part II
Installment Sale Income. Complete this part for the year of sale and any year you receive a payment or have
certain debts you must treat as a payment on installment obligations.
19
Gross profit percentage (expressed as a decimal amount). Divide line 16 by line 18. (For years
19
after the year of sale, see instructions)
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20
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If this is the year of sale, enter the amount from line 17. Otherwise, enter -0- .
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21
Payments received during year (see instructions). Don’t include interest, whether stated or unstated .
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22
Add lines 20 and 21
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22
23
Payments received in prior years (see instructions). Don’t include
interest, whether stated or unstated .
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23
24
Installment sale income. Multiply line 22 by line 19 .
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25
Enter the part of line 24 that is ordinary income under the recapture rules (see instructions) .
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26
Subtract line 25 from line 24. Enter here and on Schedule D or Form 4797 (see instructions) .
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26
Part III
Related Party Installment Sale Income. Don’t complete if you received the final payment this tax year.
27
Name, address, and taxpayer identifying number of related party
28
Did the related party resell or dispose of the property (“second disposition”) during this tax year? .
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Yes
No
29
If the answer to question 28 is “Yes,” complete lines 30 through 37 below unless one of the following conditions is met. Check the box that applies.
a
The second disposition was more than 2 years after the first disposition (other than dispositions
of marketable securities). If this box is checked, enter the date of disposition (mm/dd/yyyy)
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b
The first disposition was a sale or exchange of stock to the issuing corporation.
c
The second disposition was an involuntary conversion and the threat of conversion occurred after the first disposition.
d
The second disposition occurred after the death of the original seller or buyer.
e
It can be established to the satisfaction of the IRS that tax avoidance wasn’t a principal purpose for either of the
dispositions. If this box is checked, attach an explanation (see instructions).
30
Selling price of property sold by related party (see instructions) .
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30
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31
Enter contract price from line 18 for year of first sale .
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32
Enter the smaller of line 30 or line 31 .
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32
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Total payments received by the end of your 2017 tax year (see instructions) .
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Subtract line 33 from line 32. If zero or less, enter -0-
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35
Multiply line 34 by the gross profit percentage on line 19 for year of first sale .
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35
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36
Enter the part of line 35 that is ordinary income under the recapture rules (see instructions) .
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37
Subtract line 36 from line 35. Enter here and on Schedule D or Form 4797 (see instructions) .
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6252
For Paperwork Reduction Act Notice, see page 4.
Form
(2017)
Cat. No. 13601R
6252
Installment Sale Income
OMB No. 1545-0228
2017
Form
Attach to your tax return.
Use a separate form for each sale or other disposition of property on the installment method.
Department of the Treasury
Attachment
79
Go to www.irs.gov/Form6252 for the latest information.
Internal Revenue Service
Sequence No.
Name(s) shown on return
Identifying number
Description of property
1
2 a Date acquired (mm/dd/yyyy)
b Date sold (mm/dd/yyyy)
3
Was the property sold to a related party (see instructions) after May 14, 1980? If “No,” skip line 4 .
.
.
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.
Yes
No
4
Was the property you sold to a related party a marketable security? If “Yes,” complete Part III. If “No,”
complete Part III for the year of sale and the 2 years after the year of sale .
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Yes
No
Part I
Gross Profit and Contract Price. Complete this part for the year of sale only.
5
Selling price including mortgages and other debts. Don’t include interest, whether stated or unstated
5
6
Mortgages, debts, and other liabilities the buyer assumed or took the
property subject to (see instructions) .
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6
7
7
Subtract line 6 from line 5 . .
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8
Cost or other basis of property sold .
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8
9
Depreciation allowed or allowable .
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9
10
Adjusted basis. Subtract line 9 from line 8 .
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10
11
Commissions and other expenses of sale
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11
12
12
Income recapture from Form 4797, Part III (see instructions) .
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13
13
Add lines 10, 11, and 12 .
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14
Subtract line 13 from line 5. If zero or less, don’t complete the rest of this form (see instructions) .
14
If the property described on line 1 above was your main home, enter the amount of your excluded
15
gain (see instructions). Otherwise, enter -0- .
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15
16
Gross profit. Subtract line 15 from line 14 .
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Subtract line 13 from line 6. If zero or less, enter -0- .
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18
Contract price. Add line 7 and line 17
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18
Part II
Installment Sale Income. Complete this part for the year of sale and any year you receive a payment or have
certain debts you must treat as a payment on installment obligations.
19
Gross profit percentage (expressed as a decimal amount). Divide line 16 by line 18. (For years
19
after the year of sale, see instructions)
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20
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If this is the year of sale, enter the amount from line 17. Otherwise, enter -0- .
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21
Payments received during year (see instructions). Don’t include interest, whether stated or unstated .
21
22
Add lines 20 and 21
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22
23
Payments received in prior years (see instructions). Don’t include
interest, whether stated or unstated .
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23
24
Installment sale income. Multiply line 22 by line 19 .
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25
Enter the part of line 24 that is ordinary income under the recapture rules (see instructions) .
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25
26
Subtract line 25 from line 24. Enter here and on Schedule D or Form 4797 (see instructions) .
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26
Part III
Related Party Installment Sale Income. Don’t complete if you received the final payment this tax year.
27
Name, address, and taxpayer identifying number of related party
28
Did the related party resell or dispose of the property (“second disposition”) during this tax year? .
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Yes
No
29
If the answer to question 28 is “Yes,” complete lines 30 through 37 below unless one of the following conditions is met. Check the box that applies.
a
The second disposition was more than 2 years after the first disposition (other than dispositions
of marketable securities). If this box is checked, enter the date of disposition (mm/dd/yyyy)
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b
The first disposition was a sale or exchange of stock to the issuing corporation.
c
The second disposition was an involuntary conversion and the threat of conversion occurred after the first disposition.
d
The second disposition occurred after the death of the original seller or buyer.
e
It can be established to the satisfaction of the IRS that tax avoidance wasn’t a principal purpose for either of the
dispositions. If this box is checked, attach an explanation (see instructions).
30
Selling price of property sold by related party (see instructions) .
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30
31
31
Enter contract price from line 18 for year of first sale .
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32
Enter the smaller of line 30 or line 31 .
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32
33
Total payments received by the end of your 2017 tax year (see instructions) .
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33
34
Subtract line 33 from line 32. If zero or less, enter -0-
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34
35
Multiply line 34 by the gross profit percentage on line 19 for year of first sale .
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35
36
36
Enter the part of line 35 that is ordinary income under the recapture rules (see instructions) .
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37
Subtract line 36 from line 35. Enter here and on Schedule D or Form 4797 (see instructions) .
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6252
For Paperwork Reduction Act Notice, see page 4.
Form
(2017)
Cat. No. 13601R
2
Form 6252 (2017)
Page
General Instructions
Later Years
Sale of Depreciable Property to
Related Person
Complete lines 1 through 4 and Part II
Section references are to the Internal
for any year in which you receive a
Generally, if you sell depreciable
Revenue Code unless otherwise noted.
payment from an installment sale.
property to a related person (as defined
Future Developments
in section 453(g)(3)), you can’t report the
If you sold a marketable security to a
sale using the installment method. For
related party after May 14, 1980, and
For the latest information about
this purpose, depreciable property is
before 1987, complete Form 6252 for
developments related to Form 6252 and
any property that (in the hands of the
each year of the installment agreement,
its instructions, such as legislation
person or entity to whom you transfer it)
even if you didn’t receive a payment.
enacted after they were published, go to
is subject to the allowance for
Complete lines 1 through 4. Complete
www.irs.gov/Form6252.
depreciation. However, you can use the
Part II for any year in which you receive a
installment method if you can show to
Purpose of Form
payment from the sale. Complete Part III
the satisfaction of the IRS that avoidance
unless you received the final payment
Use Form 6252 to report income from an
of federal income taxes wasn’t one of
during the tax year.
installment sale on the installment
the principal purposes of the sale (for
After 1986, the installment method
method. Generally, an installment sale is
example, no significant tax deferral
isn’t available for the sale of marketable
a disposition of property where at least
benefits will result from the sale). If the
securities.
one payment is received after the end of
installment method doesn’t apply,
the tax year in which the disposition
If you sold property other than a
report the sale on Form 4797, Form
occurs. Ordinarily, an installment sale
marketable security to a related party
8949, or Schedule D, whichever applies.
doesn’t include a disposition of personal
after May 14, 1980, complete Form 6252
Treat all payments you will receive as if
property by a person who regularly sells
for the year of sale and for 2 years after
they were received in the year of sale.
or otherwise disposes of personal
the year of sale, even if you didn’t
Use FMV for any payment that is
property of the same type, or a
receive a payment. Complete lines 1
contingent as to amount. If the FMV
disposition of real property which is held
through 4. Complete Part II for any year
can’t be readily determined, basis is
by the taxpayer for sale to customers in
during this 2-year period in which you
recovered ratably.
the ordinary course of the taxpayer's
receive a payment from the sale.
Pledge Rule
trade or business. However, gain on
Complete Part III for the 2 years after the
some dispositions by dealers in real
year of sale unless you received the final
For certain dispositions under the
property or farmers who dispose of any
payment during the tax year.
installment method, if an installment
property used or produced in the trade
obligation is pledged as security on a
Special Rules
or business of farming may be reported
debt, the net proceeds of the secured
on the installment method.
debt are treated as payment on the
Interest
installment obligation. However, the
Don’t file Form 6252 for sales that
If any part of an installment payment you
amount treated as payment can’t be
don’t result in a gain, even if you will
received is for interest or original issue
more than the excess of the total
receive a payment in a tax year after the
discount, report that income on the
installment contract price over any
year of sale. Instead, report the entire
appropriate form or schedule. Don’t
payments received under the contract
sale on Form 4797, Sales of Business
report interest received, carrying charges
before the secured debt was obtained.
Property, Form 8949, Sales and Other
received, or unstated interest on Form
Dispositions of Capital Assets, or the
An installment obligation is pledged as
6252. See Pub. 537, Installment Sales,
Schedule D for your tax return,
security on a debt to the extent that
for details on unstated interest.
whichever applies.
payment of principal and interest on the
Installment Sales to Related Party
debt is directly secured by an interest in
Don’t file Form 6252 to report sales
the installment obligation. For sales after
during the tax year of stock or securities
A special rule applies to a first
December 16, 1999, payment on a debt
traded on an established securities
disposition (sale or exchange) of
is treated as directly secured by an
market. Instead, treat all payments as
property under the installment method to
interest in an installment obligation to the
received during the year of sale.
a related party who then makes a
extent an arrangement allows you to
second disposition (sale, exchange, gift,
Don’t file Form 6252 if you elect not to
satisfy all or part of the debt with the
or cancellation of installment note)
report the sale on the installment
installment obligation.
before making all payments on the first
method. To elect out, report the full
The pledge rule applies to any
disposition. For this purpose, a related
amount of the gain on a timely filed
installment sale after 1988 with a sales
party includes your spouse, child,
return (including extensions) on Form
price of over $150,000 except:
grandchild, parent, brother, sister, or a
4797, Form 8949, or the Schedule D for
related corporation, S corporation,
your tax return, whichever applies. If you
• Personal use property disposed of by
partnership, estate, or trust. See section
filed your original return on time without
an individual,
453(f)(1) for more details.
making the election, you can make the
• Farm property, and
election on an amended return filed no
Under this rule, treat part or all of the
• Timeshares and residential lots.
later than 6 months after the due date of
amount the related party realized (or the
your tax return, excluding extensions.
However, the pledge rule doesn’t
fair market value (FMV) if the disposed
Write “Filed pursuant to section
apply to pledges made after December
property isn’t sold or exchanged) from
301.9100-2” at the top of the amended
17, 1987, if the debt is incurred to
the second disposition as if you received
return.
refinance the principal amount of a debt
it from the first disposition at the time of
that was outstanding on December 17,
the second disposition. Figure the gain,
Which Parts To Complete
1987, and was secured by nondealer
if any, on lines 30 through 37. This rule
installment obligations on that date and
doesn’t apply if any of the conditions
Year of Sale
at all times after that date until the
listed on line 29 are met.
Complete lines 1 through 4, Part I, and
refinancing. This exception doesn’t apply
Part II. If you sold property to a related
to the extent that the principal amount of
party during the year, also complete
the debt resulting from the refinancing
Part III.
exceeds the principal amount of the
3
Form 6252 (2017)
Page
refinanced debt immediately before the
If there is no stated maximum selling
• Deductions claimed under section
refinancing. Also, the pledge rule doesn’t
price, such as in a contingent payment
1253(d)(2) and (3) (as in effect before
affect refinancing due to the calling of a
sale, attach a schedule showing the
enactment of P.L. 103-66).
debt by the creditor if the debt is then
computation of gain. Enter the taxable
• Basis reduction to investment credit
refinanced by a person other than this
part of the payment on line 24 and also
property.
creditor or someone related to the
on line 35 if Part III applies. See
Subtract the following recapture
creditor.
Temporary Regulations section
amounts and credits previously allowed
15A.453-1.
Interest on Deferred Tax
with respect to the property.
Line 6
• Section 179 or 280F.
Generally, you must pay interest on the
deferred tax related to any obligation
Enter only mortgages or other debts the
• Clean-fuel vehicles and refueling
that arises during a tax year from the
buyer assumed from the seller or took
property.
disposition of property under the
the property subject to. Don’t include
• Investment credit amount.
installment method if:
new mortgages the buyer gets from a
• Credit for employer-provided childcare
bank, the seller, or other sources.
• The property had a sales price over
facilities and services.
$150,000, and
Line 8
• Alternative motor vehicle credit.
• The aggregate balance of all nondealer
Enter the original cost and other
• Alternative fuel vehicle refueling
installment obligations arising during,
expenses you incurred in buying the
property credit.
and outstanding at the close of, the tax
property. Add the cost of improvements,
year is more than $5 million.
• Qualified plug-in electric drive motor
etc., and subtract any casualty losses
vehicle credit.
You must pay interest in subsequent
and any of the following credits
years if installment obligations that
previously allowed with respect to the
• Qualified plug-in electric vehicle credit.
originally required interest to be paid are
property.
• Qualified electric vehicle credit.
still outstanding at the close of a tax
• Nonbusiness energy property credit.
Line 11
year.
• Residential energy efficient property
The interest rules don’t apply to
Enter sales commissions, advertising
credit.
dispositions of:
expenses, attorney and legal fees, and
• Adoption credit.
other selling expenses incurred to sell
• Farm property,
• District of Columbia first-time
the property.
• Personal use property by an individual,
homebuyer credit.
Line 12
• Real property before 1988, or
• Disabled access credit.
Any ordinary income recapture under
• Personal property before 1989.
• New markets credit.
section 1245 or 1250 (including sections
See section 453(l) for more information
• Credit for employer-provided childcare
179 and 291) is fully taxable in the year
on the sale of timeshares and residential
facilities and services.
of sale even if no payments were
lots under the installment method.
received. To figure the recapture
• Energy efficient home credit.
How to report the interest. The interest
amount, complete Form 4797, Part III.
• Alternative motor vehicle credit.
isn’t figured on Form 6252. See Pub. 537
The ordinary income recapture is the
• Alternative fuel vehicle refueling
for details on how to report the interest.
amount on line 31 of Form 4797. Enter it
property credit.
on line 12 of Form 6252 and also on line
Additional Information
• Qualified railroad track maintenance
13 of Form 4797. Don’t enter any gain
See Pub. 537 for additional information,
credit.
for this property on line 32 of Form 4797.
including details about reductions in
If you used Form 4797 only to figure the
• Enhanced oil recovery credit.
selling price, the single sale of several
recapture amount on line 12 of Form
• Qualified plug-in electric drive motor
assets, like-kind exchanges, dispositions
6252, enter “N/A” on line 32 of Form
vehicle credit.
of installment obligations, and
4797. Partnerships and S corporations
• Qualified plug-in electric vehicle credit.
and their partners and shareholders, see
repossessions.
the Instructions for Form 4797.
• Qualified electric vehicle credit.
Specific Instructions
Line 14
For additional information, see Pub.
551, Basis of Assets.
Part I—Gross Profit and
Don’t file Form 6252 if line 14 is zero or
less. Instead, report the entire sale on
Line 9
Contract Price
Form 4797, Form 8949, or the Schedule
Enter all depreciation or amortization you
D for your tax return.
Line 5
deducted or were allowed to deduct
Line 15
from the date of purchase until the date
Enter the total of any money, face
of sale. Adjust the depreciation or
amount of the installment obligation, and
If the property described on line 1 was
amortization amount by adding any of
the FMV of other property or services
your main home, you may be able to
the following deductions previously
that you received or will receive in
exclude part or all of your gain. See Pub.
taken with respect to the property.
exchange for the property sold. Include
523, Selling Your Home, for details.
on line 5 any existing mortgage or other
• Section 179 expense.
Part II—Installment Sale
debt the buyer assumed or took the
• Commercial revitalization deduction.
property subject to. Don’t include stated
Income
• Deduction for clean-fuel vehicles and
interest, unstated interest, any amount
refueling property.
recomputed or recharacterized as
Line 19
interest, or original issue discount.
• Deductions claimed under sections
Enter the gross profit percentage
190 and 193.
(expressed as a decimal amount)
determined for the year of sale even if
you didn’t file Form 6252 for that year.
4
Form 6252 (2017)
Page
Line 21
Line 26
Line 33
Enter all money and the FMV of any
For trade or business property held more
If you completed Part II, enter the sum of
property or services you received in
than 1 year, enter this amount on Form
lines 22 and 23. Otherwise, enter all money
2017. Include as payments any amount
4797, line 4. If the property was held 1
and the FMV of property you received
withheld to pay off a mortgage or other
year or less or you have an ordinary gain
before 2017 from the sale. Include allocable
debt or to pay broker and legal fees.
from the sale of a noncapital asset (even
installment income and any other deemed
Generally, don’t include as a payment
if the holding period is more than 1 year),
payments from prior years. Don’t include
the buyer’s note, a mortgage, or other
enter this amount on Form 4797, line 10,
interest, whether stated or unstated.
debt assumed by the buyer. However, a
and write “From Form 6252.” If the
Line 36
note or other debt that is payable on
property was section 1250 property
See the instructions for line 25. Don’t
demand or readily tradable in an
(generally, real property that you
enter on line 36 more than the amount
established securities market is
depreciated) held more than 1 year,
considered a payment. For sales
figure the total amount of unrecaptured
shown on line 35. Any excess must be
reported in future years on Form 6252 up
occurring before October 22, 2004, a
section 1250 gain included on line 26
to the taxable part of the installment sale
note or other debt is considered a
using the Unrecaptured Section 1250
until all of the recapture has been
payment only if it was issued by a
Gain Worksheet in the Instructions for
reported.
corporation or governmental entity. If
Schedule D (Form 1040).
you didn’t receive any payments in 2017,
For capital assets, enter this amount
Line 37
enter zero. If in prior years an amount
on Schedule D as a short- or long-term
See the instructions for line 26.
was entered on the equivalent of line 34
gain on the lines identified as from Form
of the 2017 form, don’t include it on this
6252.
Paperwork Reduction Act Notice. We
line. Instead, enter it on line 23. See
Part III—Related Party
ask for the information on this form to
Pledge Rule, earlier, for details about
carry out the Internal Revenue laws of
proceeds of debt secured by installment
Installment Sale Income
the United States. You are required to
obligations that must be treated as
give us the information. We need it to
payments on installment obligations.
Line 29
ensure that you are complying with these
Line 23
If one of the conditions is met, check the
laws and to allow us to figure and collect
appropriate box and skip lines 30
the right amount of tax.
Enter all money and the FMV of property
through 37. If you checked box 29e,
or services you received before 2017
You are not required to provide the
attach an explanation. Generally, the
from the sale. Include allocable
information requested on a form that is
nontax avoidance exception will apply to
installment income and any other
subject to the Paperwork Reduction Act
the second disposition if:
deemed payments from prior years.
unless the form displays a valid OMB
• The disposition was involuntary (for
control number. Books or records
Deemed payments include amounts
example, a creditor of the related party
relating to a form or its instructions must
deemed received because of:
foreclosed on the property or the related
be retained as long as their contents
• A second disposition by a related
party declared bankruptcy), or
may become material in the
party, or
administration of any Internal Revenue
• The disposition was an installment sale
• The pledge rule of section 453A(d).
under which the terms of payment were
law. Generally, tax returns and return
substantially equal to or longer than
information are confidential, as required
Line 25
by section 6103.
those for the first sale. However, the
Enter here and on Form 4797, line 15,
resale terms must not permit significant
The time needed to complete and file
any ordinary income recapture on
deferral of recognition of gain from the
this form will vary depending on
section 1252, 1254, or 1255 property for
first sale (for example, amounts from the
individual circumstances. The estimated
the year of sale or all remaining
resale are being collected sooner).
burden for individual taxpayers filing this
recapture from a prior year sale. Don’t
form is approved under OMB control
Line 30
enter ordinary income from a section 179
number 1545-0074 and is included in the
expense deduction. If this is the year of
If the related party sold all or part of the
estimates shown in the instructions for
sale, complete Form 4797, Part III. The
property from the original sale in 2017,
their individual income tax return. The
amount from line 27c, 28b, or 29b of
enter the amount realized from the part
estimated burden for all other taxpayers
Form 4797 is the ordinary income
resold. If part was sold in an earlier year
who file this form is shown below.
recapture. Don’t enter any gain for this
and part was sold this year, enter the
Recordkeeping .
.
.
. 1 hr., 18 min.
property on line 31 or 32 of Form 4797. If
cumulative amount realized from the
you used Form 4797 only to figure the
resale.
Learning about the law
recapture on line 25 or 36 of Form 6252,
or the form
.
.
.
.
.
.
. 24 min.
Amount realized. The amount realized
enter “N/A” on lines 31 and 32 of Form
from a sale or exchange is the total of all
Preparing the form
.
.
.
.
. 1 hr.
4797.
money received plus the FMV of all
Copying, assembling, and
Also report on this line any ordinary
property or services received. The
sending the form to the IRS
. 20 min.
income recapture remaining from prior
amount realized also includes any
years on section 1245 or 1250 property
If you have comments concerning the
liabilities that were assumed by the
sold before June 7, 1984.
accuracy of these time estimates or
buyer and any liabilities to which the
suggestions for making this form
property transferred is subject, such as
Don’t enter on line 25 more than the
simpler, we would be happy to hear from
real estate taxes or a mortgage. For
amount shown on line 24. Any excess
you. See the instructions for the tax
must be reported in future years on Form
details, see Pub. 544, Sales and Other
return with which this form is filed.
6252 up to the taxable part of the
Dispositions of Assets.
installment sale until all of the recapture
has been reported.

Download IRS Form 6252 2017 Installment Sale Income

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