RE repo-what form, where?

[JenMO]

Client repoed RE. I understand the taxable amount to be put on the tax return. But, the taxable gain on reposession from the worksheet, where does that go? On Form 6252? what Line? or just on Sch D as ordinary income? I can't find any instructions after computing the taxable gain. Please any help would be appreciated.

[gkaiseril]

Client repoed RE. I understand the taxable amount to be put on the tax return. But, the taxable gain on reposession from the worksheet, where does that go? On Form 6252? what Line? or just on Sch D as ordinary income? I can't find any instructions after computing the taxable gain. Please any help would be appreciated.

Maybe more specifics about property.

Did the client take possession of the property?

If so, was the sale taxpayer financed?

Business use, residential rental, personal residence, primary residence?

Secured, unsecured, or a combination of both?

What forms have you received?

[JenMO]

repoed property was real estate-farm property, land only. Buyer couldn't make the payments and signed back the property to the seller. Farm was sold on installment, and there was a percentage cost that seller wasn't reporting. I understand that that % becomes taxable because of the reposession. Say, there was $10,000 over the last 3 years that was considered cost. Now I believe it becomes taxable, where does that $10,000 go? Form 6252? I just can't figure how to report and end the installment sale for IRS.

[veritas]

See page 14-13 in TTB to compute gain.

The gain would go to Sch D long or short depending on the holding period.

[JenMO]

Basically, the gain on reposession is the money that was received that was return of cost, correct? This money did not have taxes paid on it. Now, because of repo, that money must be reported as gain, correct? If it was long term, is it listed as reposessed installment sale and put on Schedule D? What happens to the 6252? Do you put it in the return, or it just disappears because of the transaction on Sch D?

[veritas]

I would read the page

I suggested in TTB.

If no payments were made on the installment note in the year of repossession there is no need for the form 6252. The gain goes on Sch D.

[JenMO]

I read the TTB and am figuring the taxable amount, but nowhere does it say how to put on form. So, putting on Sch d and leaving off 6252 sounds logical. thanks