Installment Sale profit %

[taxea]

My brain is fried...please help

Form 6252 Installment sale of land.

Basis is 39212. Sale price is 27000. Loss is 12212. Do I do anything with Line 19? Gross profit percentage?
I think it is the installment issue that is throwing me off. I know what to do when the property sells for more than the basis but what do I do with an installment that has a loss?

[S T]

You didn't state whether or not it was an installment sale of business or investment property

Generally an Installment sale is

a sale of property at a gain where at least one payment is to be received in a tax year following the year in which the sale occurred. The taxpayer is required to report the sale on the installment method unless a decision is made to "elect out" in the year of the sale. If the election is made, all gain must be reported as income in the year of the sale. Installment sale rules do not apply to losses Note: the installment method cannot be used to report gain from the sale of inventory or stocks and securities traded on an established securities market.

Maybe you should review Publication 537 on Installment Sales

Sandy

[newbie]

-$12,212 is less than zero.

If form 6252 done correctly should've stopped at line 14 = If zero or less do not complete the rest of this form (see instructions).

[taxmom34]

loss not allowed on installment sale, they will only report interest on schedule B

[taxea]

Sandy -thanks, I will review the pub.
Newbie-expected response from you
Taxmom-that was what I was looking for, thanks

[newbie]

Was my expected response incorrect? If not, you're welcome!

[newbie]

Per private message:

My brain is fried...please help

Form 6252 Installment sale of land.

Basis is 39212. Sale price is 27000. Loss is 12212. Do I do anything with Line 19? Gross profit percentage?
I think it is the installment issue that is throwing me off. I know what to do when the property sells for more than the basis but what do I do with an installment that has a loss?

But I did answer your questions.

1. Do I do anything with Line 19? No
Form 6252 Line 14: "If zero or less do not complete the rest of this form (see instructions)"

3. I know what to do when the property sells for more than the basis but what do I do with an installment that has a loss?
Instructions: "Do not file Form 6252 if line 14 is zero or less. Instead, report the entire sale on Form 4797 or the Schedule D for your tax return."

2. Gross profit percentage?
Gross profit percentage = Zero because there is a loss not a profit.

Glad to assist.

[S T]

Newbie Thanks

Newbie, thanks for outlining the line items

Seems like we so seldom come across installments sales now, it is easy to forget the rules and how to or whether to complete the 6252 form

Taxmom you to for confirming what I found - NO Installment sale if loss and yes you also mentioned to report the Interest on the the Installment sale (even if a loss for tax purposes) needs to be reported on Schedule B each year.

Good reminders!

Sandy

[taxea]

But I did answer your questions.

1. Do I do anything with Line 19? No
Form 6252 Line 14: "If zero or less do not complete the rest of this form (see instructions)"

3. I know what to do when the property sells for more than the basis but what do I do with an installment that has a loss?
Instructions: "Do not file Form 6252 if line 14 is zero or less. Instead, report the entire sale on Form 4797 or the Schedule D for your tax return."

2. Gross profit percentage?
Gross profit percentage = Zero because there is a loss not a profit.

Glad to assist.

now you have and I thank you.

[taxmom34]

the reason i remembered the loss not allowed on an installment sale was because i tried to do one years ago , and i tried and tried until it dawned on me to stop on that line that Newbie was referencing to. sometimes it takes a hit to the head to wake up. lol

[taxea]

the reason i remembered the loss not allowed on an installment sale was because i tried to do one years ago , and i tried and tried until it dawned on me to stop on that line that Newbie was referencing to. sometimes it takes a hit to the head to wake up. lol

I stopped on that line and didn't know what to do next....brain engaged by your "hit on the head" post. Thank you again.