Married couple selling main home for $185K has no gain. Since payments are to be received over 6 years totaling $185K, should 6252 Installment Payments form even be filed?
Since ln 15 of that form equals the amount of sale, making the Gross Profit on ln 16 equal to -0-, the 'Gross Profit Percentage' on ln 19 is equal to -0-.
Correct. No profit ==> no gross profit percentage ==> no installment sale ==> no form 6252.
The Form 6252 instructions actually tell you not to file it if there is no gain.
Thank Alan & Arthur - I tried to find that info and missed it I guess.
Where's the imputed interest in the deferred payments? Does this taxpayer have interest income to report, along with a non-deductible loss on the house sale?
Wilson wrote: : Married couple selling main home for $185K has no gain. Since payments are : to be received over 6 years totaling $185K, should 6252 Installment Payments : form even be filed?
: Since ln 15 of that form equals the amount of sale, making the Gross Profit : on ln 16 equal to -0-, the 'Gross Profit Percentage' on ln 19 is equal to -0-. : -- : Wilson 44.69, -67.3
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Again, I write as a non-expert, but I wonder if there would be some income in implied interest as it is in6 annual payments? OOf course, wit rates so low it may not be a large amount of money, but it might comlicate the tax filings quite a bit.
Wendy Baker
My understanding is that any payments made over a period of time are considered to include imputed interest. If no interest is stated, the presumption is that the sale price includes interest, and that interest must be declared.
So yes, if you sell (with periodic payments) for less than the current basis, you will have to include interest (or imply interest), which will be subject to income tax. You will not get an offset for the loss.
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