Sold a 6 plex in 2007 as an installment sale
and just renegotiated the sales
price/reduced the note amount in 2012. According to IRS
publication 537 it says to 'refigure your gross profit using Worksheet B'. They give an example like this:
If the selling price is reduced at a later date, the
gross profit on the sale also will change. You
then must refigure the gross profit percentage
for the remaining payments. Refigure your
gross profit using Worksheet B. You will spread
any remaining gain over future installments
Example. In 2010, you sold land with a basis
of $40,000 for $100,000. Your gross profit
was $60,000. You received a $20,000 down
payment and the buyer's note for $80,000. The
note provides for four annual payments of
$20,000 each, plus 8% interest
, beginning in
2011. Your gross profit percentage is 60%. You
reported a gain of $12,000 on each payment received
in 2010 and 2011.
In 2012, you and the buyer.... etc.
which I understand. What I don't see is how this gets entered on 6252 as the contract amount only gets filled in in the year of sale. Is it only line 19 which is impacted?
Further in using an automated program (turbotax) it would need to keep track of the adjusted contract amount. There is now worksheet B that gets filed with the return
I take it?