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sale of rental property on installment basis

Summit1
Level 3

Client sold rental property in 2021. This will be an installment sale with an initial down payment. Can the entire transaction ( with the exception of interest ) be done on the 6252 or do I need to do a 4797 also. I haven't done one of these in years.

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5 Replies 5
Just-Lisa-Now-
Level 15
Level 15
I think there's a way to link the disposition on the asset entry worksheet to the 6252.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
Summit1
Level 3

Thank you! I will try that and see what results I get. Right now I am just trying to get the taxpayer an amount to pay in estimated tax. I will go back into their 2020 return and try it there.

PATAX
Level 10

I have done quite a few of these in the past but I am away from my office now but here is what I remember offhand : you have to allocate the sales price and the selling expenses, like real estate commissions paid, to each of the assets sold, on the asset entry worksheets for Sch E, and you have to make sure like Lisa said that you link this up to form 6252.. Pro Series does a good job on this and it should automatically complete the form 4797 for you based on what you enter on the asset entry worksheets... there will be a location for you to enter the principal payments received and the interest received for current year... it will be a little tricky at first but once you get the hang of it it's not that bad .... just my opinion ... Hope this helps

Summit1
Level 3

Thank you very much for the additional information and advice. I will work on this and see what the results are. If I have additional questions or need some clarification, I will post additional questions.

PATAX
Level 10

You're welcome

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