Knowledge Base

15106: Group Sale Installment Sale

Fed Returns Generally

How do I enter a group sale that is also an installment sale in Drake Tax?

Beginning in Drake17, the 4562, 4797, and 6252 screens have been reformatted to allow for easier data entry for assets involved in a group sale or 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.

Current Year Group Installment Sale

To enter a group installment sale for assets that are already recorded on the 4562 screens, fill out the following fields in the If Sold section.

On the first asset, enter the:

  • Date Sold
  • 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).
  • Group sale number
    • For example, to indicate the first group installment sale on the return, enter a 1.
  • Group sale price
  • Group expense of sale
  • Fair market value of this asset (override)
  • Expense of sale for this asset (override)

On the second and subsequent assets, enter the:

  • Date sold
  • Group sale number
    • Use the same number as above if this asset belongs to the same group sale.
  • Fair market value of this asset (override)
  • Expense of sale for this asset (override)

In addition to the If Sold section of the 4562 screen, a Property Type (located below Description in Drake17 and later) is also required to be entered on each asset involved in the group/installment sale. 

If a sale that is part of the group installment sale is recorded on the 4797 screen instead of the 4562 screen, complete the 4797 screen as needed. Then, enter an Installment Sale MFC and Group sale number to tie the screens together. You can also override the fair market value and expense of sale for that asset if needed.  

Note: Sale of assets will generally be entered on the 4797 or 4562 screen, not both. See Related Links below for more information.

After completing the 4562 and/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 Group Installment Sale 01).
  • 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

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, however, you can enter amounts for lines 6 or 15 of the 6252 screen, even if a 4562/4797 is being used.

Note: If you want to complete the 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 this 6252 screen. You will also not get any worksheets to generate if you choose to manually complete the 6252 screen as all calculations would need to be done outside the software by the preparer.

After making the entries on the 4562/4797 and 6252 screens as indicated above, view the return. A new worksheet called Group Sale Summary shows in the miscellaneous forms. This report contains a breakdown of the entire group installment sale indicating how the sale price and expenses were allocated to the various assets of the group sale. The gross profit percentage is also figured on this worksheet to carry to the 6252, line 19.

If one or more of the assets need adjustments, the override fields Fair market value of this asset and Expense of sale for this asset on the 4562 screen(s) may be used to change the amounts being used by the program. 

If any assets in the group sale are not eligible to be sold on the installment method, the worksheet will show that calculation and carry those amounts to the 4797 separately for reporting. Form 6252 will also be adjusted to show only the amounts eligible for the installment sale method.

Note: Per the 6252 Instructions, sales that do not result in a gain cannot be sold on the installment method. 

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