| Publication 537 |
2001 Tax Year |
Reporting an Installment Sale
Form 6252.
Use Form 6252 to report a sale of property on the installment
method. The form is used to report the sale in the year it takes place
and to report payments received in later years. Also, if you sold
property to a related person, you may have to file the form each year
until the installment debt is paid off, whether or not you receive a
payment in that year.
Related person.
If you sell marketable securities to a related person, complete
Part III, Form 6252, for each year of the installment agreement, even
if you do not receive a payment in that year.
If you sell property other than marketable securities to a related
person, complete Part III for the year of sale and the 2 years
following the year of sale, even if you do not receive a payment.
After this 2-year period, you do not have to fill out Part III.
If the related person to whom you sold your property disposes of
it, you may have to immediately report the rest of your gain in Part
III. See Rule 2--Sale and Resale under Sale to a
Related Person, earlier, for more information.
Several assets.
If you sell two or more assets in one installment sale, you may
have to separately report the sale of each asset. The same is true if
you sell all the assets of your business in one installment sale. See
Single Sale of Several Assets and Sale of a Business,
earlier.
If you have only a few sales to separately report, use a separate
Form 6252 for each one. However, if you have to separately report the
sale of multiple assets that you sold together, prepare only one Form
6252 and attach a schedule with all the information for each asset
that is required by Form 6252. Complete Form 6252 by following the
steps listed below.
- Answer the questions at the top of the form.
- In the year of sale, do not complete Part I. Instead, write
"See attached schedule" in the margin.
- For Part II, enter the total for all the assets on lines 24,
25, and 26.
- For Part III, answer all the questions that apply. If none
of the exceptions under question 29 apply, enter the totals on lines
35, 36, and 37 for the disposed assets.
Special situations.
If you are reporting payments from an installment sale as income in
respect of a decedent or as a beneficiary of a trust, including a
partial interest in such a sale, you may not be able to provide all
the information asked for on Form 6252. To the extent possible, follow
the instructions given above and provide as many details as possible
in a statement attached to Form 6252.
For more information on how to complete Form 6252, see the form
instructions.
Other forms.
The gain from Form 6252 is carried over and entered on Schedule D
(Form 1040), Capital Gains and Losses, Form 4797,
Sales of Business Property, or both. These forms were
discussed earlier under Reporting Installment Income.
Schedule D (Form 1040).
Although the references in this publication are to the Schedule D
for Form 1040, the rules discussed also apply to Schedule D for Forms
1041 (estates and trusts), 1065 (partnerships), 1120 or 1120-A
(corporations), and 1120S (S corporations).
Form 4797.
Form 4797 is used with estate and trust, partnership, corporation,
and S corporation returns, as well as individual returns.
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