2023 Form 6252 - Installment Sale Income

Form 6252, "Installment Sale Income," is typically used to report income from the sale of property when the seller receives payments in more than one tax year. It is often associated with the installment method of reporting the sale of certain types of property, such as real estate or business assets.

Here's a general overview of how the installment sale works:

  1. Sale of Property: The taxpayer sells property and receives payments over time, rather than receiving the full sale price upfront.

  2. Reporting Income: Instead of reporting the entire gain in the year of the sale, the taxpayer reports a portion of the gain each year as payments are received.

  3. Form 6252: The taxpayer uses Form 6252 to report the installment sale and calculate the gain to be reported for the current tax year.

  4. Interest: In addition to the gain, the taxpayer may also need to report interest income on the installment payments.

For the current tax year version of Form 6252, please go here.