Installment sale / mortgage

[taxgirl]

New client this year - set up 30 year installment sale in 2005. "Owners" acquired a mortgage to payoff installment. Do I report the payoff amount as principal payments received for the current year allowing the gross profit percentage to calculate the installment sale income?

[Burke]

The amount reported on 6252 would be the principal payoff. The interest paid to the date of payoff (including the interest calculated & included in the payoff figure) would be reported on Sche B as you normally would. And the profit percentage would be calculated on that principal amt.