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Installment Sales Income Gross Profit and Contract Price

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Question
Installment Sales Income Gross Profit and Contract Price

Answer
Enter the total of any money, face amount of the installment obligation, and the FMV of other property that you received or will receive in exchange for the property sold. Include on line 5 any existing mortgage or other debt the buyer assumed or took the property subject to.
If there is no stated maximum selling price, such as in a contingent sale, attach a schedule showing the computation of gain. Enter the taxable part here.
Enter only mortgages or other debts the buyer assumed from the seller or took the property subject to. Do not include new mortgages the buyer gets from a bank, the seller, or other sources.
Enter the original cost and other expenses you incurred in buying the property. Add the cost of improvements, etc., and subtract any diesel-powered highway vehicle, enhanced oil recovery, disabled access, new markets, or employer-provided child care credit or casualty losses previously allowed. For details, see Publiation 551, Basis of Assets.
Enter all depreciation or amortization you deducted or were allowed to deduct from the date of purchase until the date of sale. Add any section 179 expense deduction; the downward basis adjustment under section 50(c) (or the corresponding provision of prior law); the deduction for qualified clean-fuel vehicle property or refueling property; deductions claimed under section 190, 193, or 1253(d)(2) or (3) (as in effect before the enactment of P.L. 103-66); and the basis reduction for the qualified electric vehicle credit. Subtract any investment tax credit recapture amount if the basis of the property was reduced under section 50(c) (or the corresponding provision of prior law); any section 179 or 280F recapture amount included in gross income in a prior tax year; any qualified clean-fuel vehicle property or refueling property deduction you were required to recapture because the property ceased to be eligible for the deduction; any recapture of the employer-provided child care facilities and services credit; and any basis increase for qualified electric vehicle recapture.
Enter sales commissions, advertising expenses, attorney and legal fees, etc., incurred to sell the property.
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.
Do not file Form 6252 if line 14 is zero or less. Instead, report the entire sale on Form 4797 or the Schedule D for your tax return.
If the property described on line 1 was your main home, you may be able to exclude part or all of your gain. See Publication 523, Selling Your Home, for details.

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Views: 1274 Created on: Jun 15, 2013
Date updated: Dec 10, 2018
Posted in: Income

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