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Please explain if business (sch K-1form 1020S) was sold in

2011, but owner got installment...
Please explain if business (sch K-1form 1020S) was sold in 2011, but owner got installment payment from it in 2012 and 2013. What form should use in Personal Tax Return in 2012? K-1 as in 2011?
Thank you
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Answered in 3 minutes by:
10/8/2013
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,875
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Lane :

Hi,

Lane :

No the K-1 is for reporting the distributive share of an owner's income, losses, etc.

Lane :

Now that the owner is receiving installment sale payments, you'll end up on schedule D of the 1040

Lane :

From that page: Generally, you will use Form 6252 to report installment sale income from casual sales of real or personal property during the tax year. You also will have to report the installment sale income on Schedule D (Form 1040), Capital Gains and Losses, or Form 4797, or both. SeeSchedule D (Form 1040) and Form 4797

Lane :

I still don't see you coming into the chat session, so I'll move us to the "Q&A" mode. … Maybe that will help … (We can still continue a dialogue there, just not in real-time chat, as we can here) ... My screen says you're offline

Lane :

Please let me know if you have any questions at all ...


Lane :

Lane

Lane :

If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better … That's the only way they will pay us here.


HOWEVER, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question.

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Hi Galina,

... just checking back in here, as I never saw you come into the chat.

But again, let me know if you have questions...

Lane
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Customer reply replied 4 years ago

Hello Lane,
Thank you for your reply. I agree with you about Form 6252. But I wander how tax preparer did 2011 Personal Tax Return. Is it right, if it's done only Form 4797 (from K-1 and K-1 is final)?


I appreciate you


Yes, you're spot on.

...could have been the final partial year and Still received the first installment payment that year.

Lane
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Customer reply replied 4 years ago


I asked one more question and don't see it. I repeat. How use form 6252 and show that only 50% of installment payments belong the ex-partner.


Thank you


Sorry,

You'll will just report the amounts received by the taxpayer .. what matters is the amuunt actually received, rather that whatever propertion it may be of any total total transaction.


For example, for basis and other information in section I you will only report HIS/HER proportionate piece.

GROSS PROFIT AND CONTRACT PRICE, (for example) should only include the taxpayer's proportion.

Gross profit PERCENTAGE however, on line 19, will be that taxpayer's gross profit profit divided by that taxpayers's portion (FROM lines 16 and 18) of the contract price.

Make sense?

Lane

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Customer reply replied 4 years ago


Yes it is


Thank you for the lessonSmile


You are very welcome :)

and thank you for the compliment.

Your positive rating, however, is thanks enough.

(That's the only way we get paid here)

Let me now if I can elp further

Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,875
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Lane and 87 other Tax Specialists are ready to help you
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Thanks so much for the rating Galina!

If you'd like to work with ME again just say "For Lane only," at the beginning of your next question


OR set me up as your preferred expert on your home page.

(Although we have MANY excellent experts here)


Regardless, thanks again,

Lane

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Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
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