Question

How is the installment sale of an entire business reported on the tax return?

Answer 1

use Form 6252 to report installment sale income from casual sales of real or personal property. However, special rules might:

1.Allow for exclusion of income
2..Require reporting on other forms, like Form 8949 or Form 4797

Each payment you receive has three parts:

1.Interest income
2.Return of your basis
3.Gain on the sale

For each year you receive a payment or are treated as receiving a payment, you must include in your income both:I

1.interest

2.Portion of the gain