Wayne Rivers <wayne[at]wayneriverscpa.com> wrote:

- quote -

While you have many figures here, you need more.

You need to know the capital gain you would have on sale had
there not been an installment sale.

Then using form 6252, you can back out the portion of the
gain not being recognized this year. You also, for your
convenience, will calculate the portion of the annual
payment that goes toward paying off principal and the
portion that goes towards interest.

The interest portion is declared by you each year on
schedule B.

The principal portion, multiplied by the proportion of the
principal representing gain, is recognized as capital gains
each year. Use Form 6252.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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"Wayne Rivers" <wayne[at]wayneriverscpa.com> wrote

- quote -

Whatever portion (ie: ratio) of profits are included in the
down payment and any monthly payments received in that year,
that's your taxable income.

You have omitted the information to compute gain on the
sale.

--
Paul A. Thomas, CPA
Athens, Georgia

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

If someone sells real estate on the following contract, what
portion would be considered installment sale income? $21,000
or $287,000?

Price: $345,000
Down payment: $58,000
Assumed mortgage: $266,000 (and would it matter if the
mortgage was formally assumed or payments are made to
mortgage company by buyer in seller's behalf?)
Excess balance of $21,000 paid in monthly installments of
$350 (w/o interest) over 5 years
Buyer will no later than five years from sale pay off the
remaining balance of both assumed and excess balance.
Title to transfer upon final payment of contract.

Thanks

Wayne Rivers

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >