15096: 6252 - Installment Sales (Drake17 to Current)

Beginning in Drake17, the 4562, 4797, and 6252 screens have been reformatted to allow for easier data entry for assets involved in an installment sale. Revisions to the screens allow you to tie multiple data entry screens together to allow data to flow from one screen/form to another with fewer manual entries. For detailed information about screen changes, see Related Links below.

The 6252 screen is now broken into two tabs. The first tab is for Form 6252 Part 1 and Part II, and contains both the current and prior year selling information. A second tab for Part III has also been added to enter information regarding a sale to a related party.

Current Year Installment Sale

To enter an installment sale for an asset that is already recorded on the 4562 screen, fill out the following fields in the If Sold section:

• Date Sold
• Sale Price
• Expense of Sale
• Installment Sale MFC
  • For example, to indicate the first installment sale on the return, enter a MFC of 1.

  

• Any other check boxes that apply (optional).

If the asset and sale is recorded on the 4797 screen instead of the 4562 screen, complete the 4797 screen as needed. Then, enter an Installment Sale MFC.

After completing the 4562 or 4797 screen(s) as above, go to the 6252 screen and make the following entries on the Part I/Part II tab:

• Enter Description of property (optional; if left blank, it defaults to the 4562 description).
• Answer question 3: Was the property sold to a related party after May 14, 1980?
  • If yes, also answer question 4 and complete Part III on the Part III tab.
• Under the Current Year Column enter:
  • Interest
    • Carries to the Schedule B as interest income
  • Principal

Notes:

• The Current Year Sale Information section is not required when a 4562 or 4797 screen is directed to the 6252 screen with use of an Installment Sale MFC. If applicable, you can enter amounts for lines 6 or 15, even if a 4562/4797 is being used.
• If you want to complete Form 6252 manually, you can check the box Asset data will NOT flow to this Form 6252, however, this entry is not recommended and no other information from the return will be carried to that 6252 screen. No worksheets are generated if you choose to manually complete the 6252 screen as all calculations would need to be done outside the software by the preparer.

Important:  you cannot use the installment method to report the sale of an asset or group of assets that does not result in a gain (EF Message 5206). See Publication 537 for details.
A common example is where one or more assets in a group sale are subject to depreciation recapture rules which results in the net being calculated as less than or equal to zero. Review the calculation on Form 4797 or the Group Sale Summary page in view mode.

Prior Year Installment Sale

If completing the 6252 screen to record income received in the current year for a prior year installment sale, you must complete the following fields on the 6252 screen to generate Form 6252 with the needed data. No entry on the 4562 or 4797 screens is required.

Starting in 2019, "...if you have an outstanding installment sale balance after the initial year, complete lines 1 through 4, Part I, and Part II for each year of the installment agreement. If you sold property to a related party during the year, also complete Part III." You will need to make all the required entries on the 6252 screen. Details of the data entry fields are included below. 

• Description of property
  
• Answer question 3: Was the property sold to a related party after May 14, 1980?
  
  • If yes, also answer question 4 and complete Part III on the Part III tab
    
• Under the Current Year Column enter: 
  
  • Interest
    
    • Carries to the Schedule B as interest income
      
  • Principal
    
• Under the Prior Years Column enter: 
  • Interest: Enter the total of all interest received in prior years
    
  • Principal: Enter the total of all principal received in prior years
    
• Final year of installment sale checkbox (ONLY if this is the final year)
  
• 2a Date acquired
  
• 2b Date sold
  
• 6 Seller’s debts assumed by buyer (optional, only if applicable)
  
• 15 Home sale excluded gain (optional, only if applicable).
  
• 19 Gross profit percentage
  
• Regular Tax
  
• AMT (if applicable)

For more information about Installment Sales or how to enter in the prior year, see the Form 6252 Instructions or Related Links below.