Inherited Installment sale Form 6252

[taxxcpa]

Assuming that a taxpayer sells some property and files Form 6252 for several years, then dies. Does his heir continue reporting the taxable principal and interest on 6252 just as the decedent would have been reporting it if he had lived? If not, what should he do?

Second question: If Estate tax applies, I am assuming that the principal balance on the date of death would be the amount to be included in the taxable estate. Is this correct?

[Gene V]

Pub. 559

Assuming that a taxpayer sells some property and files Form 6252 for several years, then dies. Does his heir continue reporting the taxable principal and interest on 6252 just as the decedent would have been reporting it if he had lived? If not, what should he do?

Second question: If Estate tax applies, I am assuming that the principal balance on the date of death would be the amount to be included in the taxable estate. Is this correct?

See if this helps, from Pub. 559 page 9 and 16.

Installment obligations. If the decedent had
sold property using the installment method and
you collect payments on an installment oblige-
tion you acquired from the decedent, use the
same gross profit percentage the decedent used
to figure the part of each payment that repre-
sents profit. Include in your income the same
profit the decedent would have included had
death not occurred. For more information, see
Publication 537, Installment Sales
.
If you dispose of an installment obligation
acquired from a decedent (other than by transfer
to the obligor), the rules explained in Publication
537 for figuring gain or loss on the disposition
apply to you.

Installment obligations. If an installment ob-
ligation owned by the decedent is transferred by
the estate to the obligor (buyer or person obli-
gated to pay) or is canceled at death, include the
income from that event in the gross income of
the estate. See Installment obligations under
Income in Respect of a Decedent, earlier. See
Publication 537 for information about installment
sales.

[taxxcpa]

Thanks, Gene

You have answered my question. I thought it should work that way, but had not been able to find it in the instructions for Form 6252 or in the Tax Book.