Should this go on form 6252

[Jan S]

A new client came in. She sold a piece of vacant land in 2003 for $110,000. Her 2006 return included form 6252. I am trying to get copies of her 2003-2005 returns.

She receives $595 per month ($7,140/yr). After some digging, I found out that the $595 is interest only. The new owner has been trying to resell the property and will pay her the $110,000 at the time of the sale. (He is a family friend.)

The 6252 showed $4,852 of installment sale income and schedule B showed $2,288 of interest. She is paying the right amount of tax, but I believe that the full $7,140 should go on schedule B. Am I correct? Would I show the sale on Schedule D when she actually receives the money?

[Matt Sova]

Amend

It looks like about 6.5% interest and that is 595/month. I think you need to amend prior returns to put the int rec'd on Sch B.

You would still do the 6252 with no principal received then when payment is received in full the gain will be recorded at that time.

[ChEAr$]

Since it started

as an installment sales, form 6252 should always have been filed for each year, including
current one, although zero would be principal collected.
So at least do that for 2007 with interest on b of course, and after 4/15 you can peruse the
other copies for 2004 and 5 and 6.