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Tax-Scholar, CPA
Category: Tax
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Experience:  Helping customers comply with and plan for income taxes
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I am preparing my own returns this year and am unsure how to

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I am preparing my own returns this year and am unsure how to list payment to us on the sale of inherited property. My father died in 1999, I inherited his commercial property. We sold it in 2006 through escrow and have been receiving a monthly escrow payment. In 2010 we received a large additional principal payment, and now in 2011 the property was paid in full with another large payment. Due date on note was March 2013. The gross profit percentage in all except one year has been .42754. Am I safe in using my previous bookkeepers figures as a guide to prepare this years return? In 2008, the gross profit percentage was .378675 for that year only, should the percentage change each year or stay the same.....I'm confused about that one thing, also because on that line for the percentage it says "for years after the year of sale, see instructions.for all the years since the sale of the property, the "Unrecaptured Section 1250 Gain has been 10,096, except for 2008 that amount is listed as 323.00.  The original sale price was 200,000.00, received 50,000.00 down payment with monthly installments of 1200.00, a lump principal pmt of 60,000.00 in 2010 and now in 2011 a payoff amount of 63,000.00.
The gross profit percentage was calculated in 2006 by dividing the gross profit of 85,508.00 by the contract price of 200,000.00 arriving at 42.7540.
Submitted: 5 years ago.
Category: Tax
Expert:  Lindie-mod replied 5 years ago.
Hi, I’m a moderator for this topic and I wonder whether you’re still waiting for an answer. If you are, please let me know and I will do my best to find an Expert to assist you right away. If not, feel free to let me know and I will cancel this question for you. Thank you!
Customer: replied 5 years ago.
I have been adding information to my question in order to further aid in answering my question, so yes am still waiting for an answer.
Expert:  Lindie-mod replied 5 years ago.

Sometimes, finding the right Expert can take a little longer than expected and we thank you greatly for your understanding. We’ll be in touch again shortly.
Customer: replied 5 years ago.
Thank you. I just noticed that for the tax year 2007, there is form 6252 AND a form 6252 AMT. The amt form is the one where the gross profit percentage is .378675 which may explain the smalller unrecaptured section 1250 gain amount. there is another gain detail worksheet with the 10,096.00 amount. I guess now my main question is do I use the same gross profit percentage as was used for the first year of reporting the inherited property sale?
Expert:  replied 5 years ago.
Thanks for using Just Answers. My goal is to provide the same expert advice I give my local clients but for a fraction of the fee.

Ideally you would use the same gross profit percentage. This amount should not change. Regardless though for 2011 I would make sure cumulatively you pick up all of the gain. You mention that the gross profit was 85,508. The 2011 amount should be whatever hasn't been reported to the IRS.

Hope this helps
Tax-Scholar, CPA
Category: Tax
Satisfied Customers: 89
Experience: Helping customers comply with and plan for income taxes
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