Form 6252

Form 6252

A form one files with the IRS to report income in the current year from an installment sale made in a previous year. For example, if one sells a truck in October for $1,000 and accepts $200 installments, one reports the installments received in January and thereafter on Form 6252.
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Fred and Sue would report the exchange in their 2005 (the year of the sale) tax return on Form 8824 (Like-Kind Exchanges form), and would report the cash deferred until 2006 on Form 6252 (Installment Income Sale form).
In their 2006 return, they would file another Form 6252 showing the receipt and taxability of the $10,000 from the prior year's sale.
Working through the items on Form 6252, you'll discover that depreciation recapture is taxable in the year of the sale up to the amount of the taxable gain.
The sale is simply reported on Schedule D or Form 4797 rather than Form 6252.
An installment sale must be reported in Part I of Form 6252 in the year of sale even if no payments are received in that year.
Information on related party sales is reported in Part III of Form 6252.
If the election is made, the taxpayer should not complete Form 6252.