I believe you can set up an installment plan for the Sale of a closely held S-corp. Client sold their S-corp via installment sale, the note was transferred to each shareholder individually. The K-1 arrived with the entire gain from the sale in box 8 of the K-1. Client is receiving proceeds over the next 5 years. I was hoping to fill out the form 6252 for this gain. Does anyone know how to create an installment sale on the individual return using the K-1 information. Do I need to contact the accountant that did the K-1 for additional information?
Would the accountant that prepared the K-1 have had to make that specific election, It sounds like the K-1 should have been completed differently to be able to establish the installment sale for my client. Is that correct?
Thank you! If the accountant states he did not make the election, then how do I create the Capital Gains listed in Box 8 of the K-1 into an installment sale. Do I just list it directly on the Disposition page? and would I need the 4797 from the S-Corp to determine the Gross profit percentage?
I don't want my client to get an IRS letter because he is not claiming the entire gain on his personal return.
You can't. The S Corp has to treat as an installment sale. You pick up the K-1 numbers.
You should be given the Gross Profit % to use for future years' payments.
Installment sale/gross profit % will be on Form 6252 not 4797.