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?
Any election would have to be done at the entity level.
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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.