grandmabee Posted March 8, 2020 Report Share Posted March 8, 2020 I haven't done one of these in years. If a client takes a discount and settles for less for a payoff on an installment sale, how do I report that? Quote Link to comment Share on other sites More sharing options...
Lee B Posted March 8, 2020 Report Share Posted March 8, 2020 You have to recalculate the capital gain percentage Quote Link to comment Share on other sites More sharing options...
grandmabee Posted March 8, 2020 Author Report Share Posted March 8, 2020 Yes, I knew that, but I guess not sure how to show on return. Do I change everything on the 6252 or just the gross profit % number. now we have to complete part one each year, not just year of sale. Quote Link to comment Share on other sites More sharing options...
Lee B Posted March 8, 2020 Report Share Posted March 8, 2020 Copied from Pub 537: "Example. In 2016, you sold land with a basis of $40,000 for $100,000. Your gross profit was $60,000. You received a $20,000 down payment and the buyer's note for $80,000. The note provides for four annual payments of $20,000 each, plus 8% interest, beginning in 2017. Your gross profit percentage is 60%. You reported a gain of $12,000 on each payment received in 2016 and 2017. In 2018, you and the buyer agreed to reduce the purchase price to $85,000 and payments during 2018, 2019, and 2020 are reduced to $15,000 for each year. The new gross profit percentage, 46.67%, is figured on Example—Worksheet B. You will report a gain of $7,000 (46.67% of $15,000) on each of the $15,000 installments due in 2018, 2019, and 2020." Quote Link to comment Share on other sites More sharing options...
grandmabee Posted March 8, 2020 Author Report Share Posted March 8, 2020 Thank you, it made me chuckle, I guess I could also look up the instruction before I asked on here. Quote Link to comment Share on other sites More sharing options...
Catherine Posted March 9, 2020 Report Share Posted March 9, 2020 18 hours ago, grandmabee said: Thank you, it made me chuckle, I guess I could also look up the instruction before I asked on here. where's the fun in that? Quote Link to comment Share on other sites More sharing options...
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