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Download 2010 Tax Forms

Download 2010 tax forms Index A Affiliated corporations, Aircraft used by affiliated corporations. Download 2010 tax forms Agri-biodiesel, defined, Agri-biodiesel. Download 2010 tax forms Air transportation taxes, Air Transportation Taxes 225-mile-zone rule, Taxable transportation. Download 2010 tax forms Alaska, Transportation between the continental U. Download 2010 tax forms S. Download 2010 tax forms and Alaska or Hawaii. Download 2010 tax forms , Transportation within Alaska or Hawaii. Download 2010 tax forms , Alaska and Hawaii. Download 2010 tax forms Baggage, Excess baggage. Download 2010 tax forms Bonus tickets, Bonus tickets. Download 2010 tax forms Credits or refunds, Credits or refunds. Download 2010 tax forms Exemptions, Exemptions. Download 2010 tax forms Export, Exportation. Download 2010 tax forms Fixed-wing aircraft, Fixed-wing aircraft uses. Download 2010 tax forms Hawaii, Transportation between the continental U. Download 2010 tax forms S. Download 2010 tax forms and Alaska or Hawaii. Download 2010 tax forms , Transportation within Alaska or Hawaii. Download 2010 tax forms , Alaska and Hawaii. Download 2010 tax forms Helicopters, Certain helicopter uses. Download 2010 tax forms , Transportation of Property by Air International air travel facilities, International Air Travel Facilities Military personnel, Military personnel on international trips. Download 2010 tax forms Package tours, Package tours. Download 2010 tax forms Persons by air, Transportation of Persons by Air Persons liable, Liability for tax. Download 2010 tax forms , Liability for tax. Download 2010 tax forms Property by air, Transportation of Property by Air Tax rates, Transportation of Persons by Air Taxable transportation, Taxable transportation. Download 2010 tax forms Travel agency, Liability for tax. Download 2010 tax forms Uninterrupted international, Uninterrupted international air transportation. Download 2010 tax forms Aircraft, Fixed-wing aircraft uses. Download 2010 tax forms Affiliated corporations, Aircraft used by affiliated corporations. Download 2010 tax forms Small planes, Small aircraft. Download 2010 tax forms Aircraft museum, In an aircraft or vehicle owned by an aircraft museum (No. Download 2010 tax forms 15). Download 2010 tax forms Alaska Air transportation taxes, Transportation between the continental U. Download 2010 tax forms S. Download 2010 tax forms and Alaska or Hawaii. Download 2010 tax forms Tax on diesel fuel or kerosene, Removal for sale or use in Alaska. Download 2010 tax forms Alcohol and tobacco taxes, Excise Taxes Not Covered Alternative fuel credit, Alternative fuel credit. Download 2010 tax forms Alternative fuel, defined, Other fuels. Download 2010 tax forms American Red Cross, International organizations and the American Red Cross. Download 2010 tax forms Answering service, Answering services. Download 2010 tax forms Appeal procedures, Examination and Appeal Procedures Approved refinery, defined, Approved terminal or refinery. Download 2010 tax forms Approved terminal, defined, Approved terminal or refinery. Download 2010 tax forms Arrow shafts, Arrow Shafts Assistance (see Tax help) Aviation gasoline, defined, Aviation gasoline. Download 2010 tax forms B Back-up tax, Back-up Tax Biodiesel, defined, Biodiesel. Download 2010 tax forms Blended taxable fuel, defined, Blended taxable fuel. Download 2010 tax forms Blender, defined, Blender. Download 2010 tax forms Blocked pump, Blocked pump. Download 2010 tax forms Blood collector organizations, qualified, Exclusive use by a qualified blood collector organization (No. Download 2010 tax forms 11). Download 2010 tax forms , Qualified blood collector organizations. Download 2010 tax forms Boats, In a boat engaged in commercial fishing (No. Download 2010 tax forms 4). Download 2010 tax forms Bonus tickets, Bonus tickets. Download 2010 tax forms Bows, Quivers, Broadheads, and Points, Bows, Quivers, Broadheads, and Points Bulk transfer, defined, Bulk transfer. Download 2010 tax forms Bulk transfer/terminal system, defined, Bulk transfer/terminal system. Download 2010 tax forms Buses, In certain intercity and local buses (No. Download 2010 tax forms 5). Download 2010 tax forms , In a qualified local bus (No. Download 2010 tax forms 6). Download 2010 tax forms , In a school bus (No. Download 2010 tax forms 7). Download 2010 tax forms Tire tax, Qualifying intercity or local bus. Download 2010 tax forms C Cellulosic biofuel, Cellulosic biofuel. Download 2010 tax forms Chemicals, ozone-depleting, Environmental Taxes Claims Claiming a credit, Claiming a Credit on Form 4136 Claiming a refund, Claiming A Refund Filing claims, Filing Claims Coal Blending, Blending. Download 2010 tax forms Exemptions, Exemption from tax. Download 2010 tax forms Producer, Coal Production, Coal production. Download 2010 tax forms Selling price, Determining tonnage or selling price. Download 2010 tax forms Tax rates, Tax rates. Download 2010 tax forms Coin-operated telephones, Coin-operated telephones. Download 2010 tax forms Comments, Comments and suggestions. Download 2010 tax forms Commercial aviation, In commercial aviation (other than foreign trade). Download 2010 tax forms Commercial fishing, In a boat engaged in commercial fishing (No. Download 2010 tax forms 4). Download 2010 tax forms Commercial waterway transportation, Commercial waterway transportation. Download 2010 tax forms Communications taxes Credits or refunds, Credits or Refunds Exemptions, Exemptions Figuring the tax, Figuring the tax. Download 2010 tax forms Local telephone service, Local telephone service. Download 2010 tax forms Local-only service, Local-only service. Download 2010 tax forms Private communication service, Private communication service. Download 2010 tax forms Teletypewriter exchange service, Teletypewriter exchange service. Download 2010 tax forms Credit card purchases Aviation gasoline, Credit card purchases. Download 2010 tax forms Gasoline, Credit card purchases. Download 2010 tax forms Kerosene for use in aviation, Credit card purchases. Download 2010 tax forms Undyed diesel fuel, Credit Card Purchases. Download 2010 tax forms Undyed kerosene, Credit Card Purchases. Download 2010 tax forms Credit or refund Gas guzzler tax, Credit or refund. Download 2010 tax forms Manufacturers taxes, Credits or Refunds Resale of tax-paid semitrailers, Tax on resale of tax-paid trailers and semitrailers. Download 2010 tax forms Retail tax, Credits or refunds. Download 2010 tax forms Tire tax, Credit or refund. Download 2010 tax forms Vaccines, Credit or refund. Download 2010 tax forms Credits, Claiming a Credit on Form 4136 D Deposits Net tax liability, Amount of Deposits Deposits, How to make, How To Make Deposits Diesel fuel Definitions, Diesel Fuel and Kerosene Exported, Diesel Fuel and Kerosene Diesel-water fuel emulsion, defined, Diesel-water fuel emulsion. Download 2010 tax forms Dyed diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Dyed kerosene, Dyed Diesel Fuel and Dyed Kerosene E Electric outboard motors, Electric outboard boat motors. Download 2010 tax forms Enterer, defined, Enterer. Download 2010 tax forms Entry, defined, Entry. Download 2010 tax forms Environmental taxes Credit or refund, Credits or refunds. Download 2010 tax forms Exceptions, Exceptions. Download 2010 tax forms Ozone-depleting chemicals (ODCs), Environmental Taxes United States (defined), Environmental Taxes Examination procedures, Examination and Appeal Procedures Excluded liquid, Diesel Fuel and Kerosene Exempt articles, retail tax, Articles exempt from tax. Download 2010 tax forms Exempt communication services American Red Cross, International organizations and the American Red Cross. Download 2010 tax forms Answering service, Answering services. Download 2010 tax forms Coin-operated telephones, Coin-operated telephones. Download 2010 tax forms Installation charges, Installation charges. Download 2010 tax forms International organizations, International organizations and the American Red Cross. Download 2010 tax forms Mobile radio telephone service, Mobile radio telephone service. Download 2010 tax forms News services, News services. Download 2010 tax forms Nonprofit educational organizations, Nonprofit educational organizations. Download 2010 tax forms Nonprofit hospitals, Nonprofit hospitals. Download 2010 tax forms Private communication service, Private communication service. Download 2010 tax forms Qualified blood collector organizations, Qualified blood collector organizations. Download 2010 tax forms Radio broadcasts, News services. Download 2010 tax forms Security systems, Telephone-operated security systems. Download 2010 tax forms Exempt sales, heavy trucks, Sales exempt from tax. Download 2010 tax forms Exemptions Air transportation taxes, Exemptions. Download 2010 tax forms Bonus tickets, Bonus tickets. Download 2010 tax forms Coal, Exemption from tax. Download 2010 tax forms Communications taxes, Exemptions Federal government, Federal, state, and local government. Download 2010 tax forms Fixed-wing aircraft, Fixed-wing aircraft uses. Download 2010 tax forms For export, Exemptions Further manufacturing, Exemptions Helicopters, Certain helicopter uses. Download 2010 tax forms Indian handicrafts, Exemptions Indian tribal governments, Federal, state, and local government. Download 2010 tax forms Military personnel, Military personnel on international trips. Download 2010 tax forms Nonprofit educational organizations, Federal, state, and local government. Download 2010 tax forms , Exemptions Qualified blood collector organizations, Exemptions State and local governments, Federal, state, and local government. Download 2010 tax forms , Exemptions Taxable tires, Tires exempt from tax. Download 2010 tax forms Vessel supplies, Exemptions Export, Export (No. Download 2010 tax forms 3). Download 2010 tax forms Exported taxable fuel, Exported taxable fuel. Download 2010 tax forms F Farming, On a farm for farming purposes (No. Download 2010 tax forms 1). Download 2010 tax forms Federal government, Federal, state, and local government. Download 2010 tax forms Fishing, In a boat engaged in commercial fishing (No. Download 2010 tax forms 4). Download 2010 tax forms Fishing rods and fishing poles. Download 2010 tax forms , Fishing rods and fishing poles. Download 2010 tax forms Fishing tackle boxes, Fishing tackle boxes. Download 2010 tax forms Fixed-wing aircraft, Fixed-wing aircraft uses. Download 2010 tax forms Floor stocks tax Ozone-depleting chemicals, Floor Stocks Tax Floor stocks, ODCs, Environmental Taxes Foreign trade, In foreign trade (No. Download 2010 tax forms 9). Download 2010 tax forms Form 1363, Exportation. Download 2010 tax forms 4136, Claiming a Credit on Form 4136 6197, Gas Guzzler Tax, Form 6197. Download 2010 tax forms , Attachments to Form 720. Download 2010 tax forms 637, Reminders 6627, Environmental Taxes, Attachments to Form 720. Download 2010 tax forms 720, Claiming A Refund, Form 6197. Download 2010 tax forms , Filing Form 720 720X, Form 720X. Download 2010 tax forms 8849, Claiming A Refund 8864, Biodiesel Sold as But Not Used as Fuel Form 720 Attachments, Attachments to Form 720. Download 2010 tax forms Due dates, Due dates. Download 2010 tax forms Final return, Final return. Download 2010 tax forms Schedule A, Filing Form 720 Schedule C, Filing Form 720 Schedule T, Filing Form 720 Free tax services, How To Get Tax Help Fuels Alternative fuel, Other Fuels (Including Alternative Fuels) Diesel, Diesel Fuel and Kerosene Diesel-water fuel emulsion, Diesel-Water Fuel Emulsion For use in aviation, Kerosene for Use in Aviation Gasoline, Gasoline and Aviation Gasoline Kerosene, Diesel Fuel and Kerosene Other Fuels, Other Fuels (Including Alternative Fuels) Used on inland waterways, Fuels Used on Inland Waterways G Gambling, Taxable situations. Download 2010 tax forms Gas guzzler tax Automobiles, Automobiles. Download 2010 tax forms Credit or refund, Credit or refund. Download 2010 tax forms Limousines, Automobiles. Download 2010 tax forms Vehicles not subject to tax, Vehicles not subject to tax. Download 2010 tax forms Gasoline blendstocks, Gasoline Blendstocks Gasoline, defined, Gasoline. Download 2010 tax forms H Hawaii, air transportation taxes, Transportation between the continental U. Download 2010 tax forms S. Download 2010 tax forms and Alaska or Hawaii. Download 2010 tax forms Heavy Motor Vehicle User Fee, Excise Taxes Not Covered Heavy trucks First retail sale, defined, First retail sale defined. Download 2010 tax forms Further manufacture, Further manufacture. Download 2010 tax forms Installment sales, Installment sales. Download 2010 tax forms Parts or accessories, Parts or accessories. Download 2010 tax forms Presumptive retail sales price, Presumptive retail sales price. Download 2010 tax forms Related persons, Related person. Download 2010 tax forms Separate purchases, Separate purchase. Download 2010 tax forms Tax base, Determination of tax base. Download 2010 tax forms Tax rate, Retail Tax on Heavy Trucks, Trailers, and Tractors Helicopter, Certain helicopter uses. Download 2010 tax forms Help (see Tax help) Highway vehicle, Highway vehicle. Download 2010 tax forms , In a highway vehicle owned by the United States that is not used on a highway (No. Download 2010 tax forms 12). Download 2010 tax forms Highway vehicle (Diesel-powered), Diesel-powered highway vehicle. Download 2010 tax forms I Identifying number, Taxpayer identification number. Download 2010 tax forms Imported taxable products (ODCs), Imported Taxable Products Income, include in, Including the Credit or Refund in Income Indoor tanning services, Indoor Tanning Services Tax Information returns, liquid products, Information Returns Inland waterways, Fuels Used on Inland Waterways Intercity and local buses, In certain intercity and local buses (No. Download 2010 tax forms 5). Download 2010 tax forms Interest and penalties, Penalties and Interest International air travel facilities, International Air Travel Facilities K Kerosene Definitions, Diesel Fuel and Kerosene Exported, Diesel Fuel and Kerosene For use in aviation, Kerosene for Use in Aviation L Liquid products, information returns, Information Returns Local telephone service, Local telephone service. Download 2010 tax forms Local-only service, Local-only service. Download 2010 tax forms M Manufacturer, defined, Manufacturer. Download 2010 tax forms Manufacturers taxes Arrow shafts, Arrow Shafts Bows, Quivers, Broadheads, and Points, Bows, Quivers, Broadheads, and Points Coal, Coal Credits or refunds, Credits or Refunds Exemptions, Exemptions Gas guzzler tax, Gas Guzzler Tax Lease, Lease considered sale. Download 2010 tax forms Lease payments, Partial payments. Download 2010 tax forms Partial payments, Partial payments. Download 2010 tax forms Registration, Registration requirements. Download 2010 tax forms Related person, Related person. Download 2010 tax forms Requirements for exempt sales, Requirements for Exempt Sales Sale, Sale. Download 2010 tax forms Sport fishing equipment, Sport Fishing Equipment Taxable Tires, Taxable Tires Vaccines, Vaccines Medical device tax, Taxable medical devices. Download 2010 tax forms Military aircraft, In military aircraft (No. Download 2010 tax forms 16). Download 2010 tax forms Mobile radio telephone service, Mobile radio telephone service. Download 2010 tax forms N News services, News services. Download 2010 tax forms Nonprofit educational organization, Exclusive use by a nonprofit educational organization (No. Download 2010 tax forms 13). Download 2010 tax forms Nonprofit educational organization use and state use, Nonprofit educational organization and state use. Download 2010 tax forms Nonprofit educational organizations, Nonprofit educational organizations. Download 2010 tax forms , Federal, state, and local government. Download 2010 tax forms Nontaxable uses, definitions, Definitions of Nontaxable Uses Nontaxable uses, type of use table, Definitions of Nontaxable Uses O Obligations not in registered form, Obligations Not in Registered Form Off-highway use, Off-highway business use (No. Download 2010 tax forms 2). Download 2010 tax forms Oil spill liability, Environmental Taxes Other Fuels (Including Alternative Fuels), Other Fuels (Including Alternative Fuels) Other fuels, defined, Other fuels. Download 2010 tax forms Ozone-depleting chemicals Floor stocks tax, Floor Stocks Tax Imported taxable products, Imported Taxable Products P Patient-centered outcomes research fee, Patient-Centered Outcomes Research Fee Payment of taxes, Payment of Taxes Penalties Dyed diesel fuel, Penalty. Download 2010 tax forms Dyed kerosene, Penalty. Download 2010 tax forms Pipeline operator, defined, Pipeline operator. Download 2010 tax forms Position holder, defined, Position holder. Download 2010 tax forms Publications (see Tax help) Q Qualified local bus, In a qualified local bus (No. Download 2010 tax forms 6). Download 2010 tax forms R Rack, defined, Rack. Download 2010 tax forms Radio broadcasts, News services. Download 2010 tax forms Records, Refiner, defined, Refiner. Download 2010 tax forms Refinery, defined, Refinery. Download 2010 tax forms Refunds, Claiming A Refund Refunds of second tax, Refunds of Second Tax Registered ultimate vendor, Sales by Registered Ultimate Vendors, Registered ultimate vendor. Download 2010 tax forms Registrant, Taxable fuel registrant. Download 2010 tax forms Registrant, defined, Registrant. Download 2010 tax forms Registration, Registration Requirements Form 637, Reminders Registration-required obligations, Obligations Not in Registered Form Related persons Heavy trucks, Related person. Download 2010 tax forms Sport fishing equipment, Related person. Download 2010 tax forms Removal, defined, Removal. Download 2010 tax forms Retail tax Credits or refunds, Credits or refunds. Download 2010 tax forms Heavy trucks, Retail Tax on Heavy Trucks, Trailers, and Tractors Rulings Program, Rulings Program Rural airports, Rural airports. Download 2010 tax forms S Sale, defined, Sale. Download 2010 tax forms Sales by registered ultimate vendors, gasoline, Sales by registered ultimate vendors. Download 2010 tax forms Sales by registered ultimate vendors, kerosene for use in aviation, Sales by Registered Ultimate Vendors Sales price Bonus goods, Bonus goods. Download 2010 tax forms Cost of transportation, Manufacturers taxes based on sale price. Download 2010 tax forms Delivery costs, Manufacturers taxes based on sale price. Download 2010 tax forms Discounts, Manufacturers taxes based on sale price. Download 2010 tax forms Installation costs, Manufacturers taxes based on sale price. Download 2010 tax forms Insurance costs, Manufacturers taxes based on sale price. Download 2010 tax forms Local advertising charges, Manufacturers taxes based on sale price. Download 2010 tax forms Manufacturers excise tax, Manufacturers taxes based on sale price. Download 2010 tax forms Rebates, Manufacturers taxes based on sale price. Download 2010 tax forms Retail dealer preparation costs, Manufacturers taxes based on sale price. Download 2010 tax forms Warranty charges, Manufacturers taxes based on sale price. Download 2010 tax forms School bus, In a school bus (No. Download 2010 tax forms 7). Download 2010 tax forms Second generation biofuel, Second generation biofuel. Download 2010 tax forms Security systems, Telephone-operated security systems. Download 2010 tax forms Ship passenger tax, Ship Passenger Tax Special September rule, When to deposit, Special rule for deposits of taxes in September. Download 2010 tax forms Sport fishing equipment List of equipment, Sport Fishing Equipment Resales, Certain equipment resale. Download 2010 tax forms State and local governments, Federal, state, and local government. Download 2010 tax forms State or local governments, Exclusive use by a state, political subdivision of a state, or the District of Columbia (No. Download 2010 tax forms 14). Download 2010 tax forms State or nonprofit educational organization use, Sales by registered ultimate vendors. Download 2010 tax forms State use, Registered ultimate vendor (state use). Download 2010 tax forms , State use. Download 2010 tax forms State, defined, State. Download 2010 tax forms Suggestions, Comments and suggestions. Download 2010 tax forms T Tanning tax, Indoor Tanning Services Tax Tax help, How To Get Tax Help Tax rate, Electric outboard boat motors. Download 2010 tax forms Air transportation of persons, Transportation of Persons by Air Air transportation of property, Transportation of Property by Air Arrow shafts, Arrow Shafts Bows, Quivers, Broadheads, and Points, Bows, Quivers, Broadheads, and Points Coal, Tax rates. Download 2010 tax forms Electric outboard motor, Electric outboard boat motors. Download 2010 tax forms International air travel facilities, International Air Travel Facilities Obligations not in registered form, Obligations Not in Registered Form Policies issued by foreign persons, Foreign Insurance Taxes Ship passenger tax, Ship Passenger Tax Sport fishing equipment, Sport Fishing Equipment Trucks, Retail Tax on Heavy Trucks, Trailers, and Tractors Taxable fuel registrant, Taxable fuel registrant. Download 2010 tax forms Taxable Tires Manufacturers taxes, Taxable Tires Taxable tires Exemptions, Tires exempt from tax. Download 2010 tax forms Taxes, Payment of, Payment of Taxes Taxpayer identification number, Taxpayer identification number. Download 2010 tax forms Teletypewriter exchange service, Teletypewriter exchange service. Download 2010 tax forms Terminal operator, defined, Terminal operator. Download 2010 tax forms Terminal, defined, Terminal. Download 2010 tax forms Throughputter, defined, Throughputter. Download 2010 tax forms Tires Credit against heavy truck tax, Tire credit. Download 2010 tax forms Credit or refund of tax, Credit or refund. Download 2010 tax forms Train, Use in a train. Download 2010 tax forms Train (Diesel-powered), Diesel-powered train. Download 2010 tax forms Transmix, Diesel Fuel and Kerosene Travel agency, Liability for tax. Download 2010 tax forms TTY/TDD information, How To Get Tax Help Two-party exchanges, Two-party exchanges. Download 2010 tax forms , Two-party exchanges. Download 2010 tax forms U Ultimate purchaser, Ultimate purchaser. Download 2010 tax forms Uninterrupted international air transportation, Uninterrupted international air transportation. Download 2010 tax forms , Military personnel on international trips. Download 2010 tax forms Used other than as a fuel Diesel fuel and kerosene, For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel (No. Download 2010 tax forms 8). Download 2010 tax forms Uses, nontaxable Alternative fuels, Other Fuels (Including Alternative Fuels) Aviation gasoline, Gasoline and Aviation Gasoline Diesel fuel, Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation) Diesel-water fuel emulsion, Diesel-Water Fuel Emulsion Gasoline, Gasoline and Aviation Gasoline Kerosene, Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation) Kerosene for use in aviation, Ultimate purchasers. Download 2010 tax forms Liquefied petroleum gas (LPG), Other Fuels (Including Alternative Fuels) Other Fuels, Other Fuels (Including Alternative Fuels) V Vaccines Credit or refund, Credit or refund. Download 2010 tax forms Manufacturers tax, What's New, Vaccines Vehicles Gas guzzler, Gas Guzzler Tax Imported, Imported automobiles. Download 2010 tax forms Law enforcement, Vehicles not subject to tax. Download 2010 tax forms Vendors, registered ultimate, Sales by Registered Ultimate Vendors, Registered ultimate vendor. Download 2010 tax forms Vessel operator, defined, Vessel operator. Download 2010 tax forms W Wagering and occupational wagering fee, Excise Taxes Not Covered When to deposit, When To Make Deposits Prev  Up     Home   More Online Publications
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The Download 2010 Tax Forms

Download 2010 tax forms 10. Download 2010 tax forms   Installment Sales Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Installment Sale of a Farm Installment MethodWhen to elect out. Download 2010 tax forms Revoking the election. Download 2010 tax forms More information. Download 2010 tax forms Figuring Installment Sale Income Payments Received or Considered Received ExampleSection 1231 gains. Download 2010 tax forms Summary. Download 2010 tax forms Introduction An installment sale is a sale of property where you receive at least one payment after the tax year of the sale. Download 2010 tax forms If you realize a gain on an installment sale, you may be able to report part of your gain when you receive each payment. Download 2010 tax forms This method of reporting gain is called the installment method. Download 2010 tax forms You cannot use the installment method to report a loss. Download 2010 tax forms You can choose to report all of your gain in the year of sale. Download 2010 tax forms Installment obligation. Download 2010 tax forms   The buyer's obligation to make future payments to you can be in the form of a deed of trust, note, land contract, mortgage, or other evidence of the buyer's debt to you. Download 2010 tax forms Topics - This chapter discusses: The general rules that apply to using the installment method Installment sale of a farm Useful Items - You may want to see: Publication 523 Selling Your Home 535 Business Expenses 537 Installment Sales 538 Accounting Periods and Methods 544 Sales and Other Dispositions of Assets Form (and Instructions) 4797 Sales of Business Property 6252 Installment Sale Income See chapter 16 for information about getting publications and forms. Download 2010 tax forms Installment Sale of a Farm The installment sale of a farm for one overall price under a single contract is not the sale of a single asset. Download 2010 tax forms It generally includes the sale of real property and personal property reportable on the installment method. Download 2010 tax forms It may also include the sale of property for which you must maintain an inventory, which cannot be reported on the installment method. Download 2010 tax forms See Inventory , later. Download 2010 tax forms The selling price must be allocated to determine the amount received for each class of asset. Download 2010 tax forms The tax treatment of the gain or loss on the sale of each class of assets is determined by its classification as a capital asset, as property used in the business, or as property held for sale and by the length of time the asset was held. Download 2010 tax forms (See chapter 8 for a discussion of capital assets and chapter 9 for a discussion of property used in the business. Download 2010 tax forms ) Separate computations must be made to figure the gain or loss for each class of asset sold. Download 2010 tax forms See Sale of a Farm in chapter 8. Download 2010 tax forms If you report the sale of property on the installment method, any depreciation recapture under section 1245 or 1250 of the Internal Revenue Code is generally taxable as ordinary income in the year of sale. Download 2010 tax forms See Depreciation recapture , later. Download 2010 tax forms This applies even if no payments are received in that year. Download 2010 tax forms Installment Method An installment sale is a sale of property where you receive at least one payment after the tax year of the sale. Download 2010 tax forms A farmer who is not required to maintain an inventory can use the installment method to report gain from the sale of property used or produced in farming. Download 2010 tax forms See Inventory , later, for information on the sale of farm property where inventory items are included in the assets sold. Download 2010 tax forms If a sale qualifies as an installment sale, the gain must be reported under the installment method unless you elect out of using the installment method. Download 2010 tax forms Electing out of the installment method. Download 2010 tax forms   If you elect not to use the installment method, you generally report the entire gain in the year of sale, even though you do not receive all the sale proceeds in that year. Download 2010 tax forms   To make this election, do not report your sale on Form 6252. Download 2010 tax forms Instead, report it on Schedule D (Form 1040), Form 4797, or both. Download 2010 tax forms When to elect out. Download 2010 tax forms   Make this election by the due date, including extensions, for filing your tax return for the year the sale takes place. Download 2010 tax forms   However, if you timely file your tax return for the year the sale takes place without making the election, you still can make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Download 2010 tax forms Write “Filed pursuant to section 301. Download 2010 tax forms 9100-2” at the top of the amended return and file it where the original return was filed. Download 2010 tax forms Revoking the election. Download 2010 tax forms   Once made, the election can be revoked only with IRS approval. Download 2010 tax forms A revocation is retroactive. Download 2010 tax forms More information. Download 2010 tax forms   See Electing Out of the Installment Method in Publication 537 for more information. Download 2010 tax forms Inventory. Download 2010 tax forms   The sale of farm inventory items cannot be reported on the installment method. Download 2010 tax forms All gain or loss on their sale must be reported in the year of sale, even if you receive payment in later years. Download 2010 tax forms   If inventory items are included in an installment sale, you may have an agreement stating which payments are for inventory and which are for the other assets being sold. Download 2010 tax forms If you do not, each payment must be allocated between the inventory and the other assets sold. Download 2010 tax forms Sale at a loss. Download 2010 tax forms   If your sale results in a loss, you cannot use the installment method. Download 2010 tax forms If the loss is on an installment sale of business assets, you can deduct it only in the tax year of sale. Download 2010 tax forms Figuring Installment Sale Income Each payment on an installment sale usually consists of the following three parts. Download 2010 tax forms Interest income. Download 2010 tax forms Return of your adjusted basis in the property. Download 2010 tax forms Gain on the sale. Download 2010 tax forms In each year you receive a payment, you must include in income both the interest part and the part that is your gain on the sale. Download 2010 tax forms You do not include in income the part that is the return of your basis in the property. Download 2010 tax forms Basis is the amount of your investment in the property for installment sale purposes. Download 2010 tax forms Interest income. Download 2010 tax forms   You must report interest as ordinary income. Download 2010 tax forms Interest is generally not included in a down payment. Download 2010 tax forms However, you may have to treat part of each later payment as interest, even if it is not called interest in your agreement with the buyer. Download 2010 tax forms Interest provided in the agreement is called stated interest. Download 2010 tax forms If the agreement does not provide for enough stated interest, there may be unstated interest or original issue discount. Download 2010 tax forms See Unstated interest , later. Download 2010 tax forms    You must continue to report the interest income on payments you receive in subsequent years as interest income. Download 2010 tax forms Adjusted basis and installment sale income (gain on sale). Download 2010 tax forms   After you have determined how much of each payment to treat as interest, you treat the rest of each payment as if it were made up of two parts. Download 2010 tax forms A tax-free return of your adjusted basis in the property, and Your gain (referred to as “installment sale income” on Form 6252). Download 2010 tax forms Figuring adjusted basis for installment sale purposes. Download 2010 tax forms   You can use Worksheet 10-1 to figure your adjusted basis in the property for installment sale purposes. Download 2010 tax forms When you have completed the worksheet, you will also have determined the gross profit percentage necessary to figure your installment sale income (gain) for this year. Download 2010 tax forms    Worksheet 10-1. Download 2010 tax forms Figuring Adjusted Basis and Gross Profit Percentage 1. Download 2010 tax forms Enter the selling price for the property   2. Download 2010 tax forms Enter your adjusted basis for the property     3. Download 2010 tax forms Enter your selling expenses     4. Download 2010 tax forms Enter any depreciation recapture     5. Download 2010 tax forms Add lines 2, 3, and 4. Download 2010 tax forms  This is your adjusted basis  for installment sale purposes   6. Download 2010 tax forms Subtract line 5 from line 1. Download 2010 tax forms If zero or less, enter -0-. Download 2010 tax forms  This is your gross profit     If the amount entered on line 6 is zero, Stop here. Download 2010 tax forms You cannot use the installment method. Download 2010 tax forms   7. Download 2010 tax forms Enter the contract price for the property   8. Download 2010 tax forms Divide line 6 by line 7. Download 2010 tax forms This is your gross profit percentage   Selling price. Download 2010 tax forms   The selling price is the total cost of the property to the buyer and includes the following. Download 2010 tax forms Any money you are to receive. Download 2010 tax forms The fair market value (FMV) of any property you are to receive (FMV is discussed at Property used as a payment under Payments Received or Considered Received ). Download 2010 tax forms Any existing mortgage or other debt the buyer pays, assumes, or takes (a note, mortgage, or any other liability, such as a lien, accrued interest, or taxes you owe on the property). Download 2010 tax forms Any of your selling expenses the buyer pays. Download 2010 tax forms Do not include stated interest, unstated interest, any amount recomputed or recharacterized as interest, or original issue discount. Download 2010 tax forms Adjusted basis for installment sale purposes. Download 2010 tax forms   Your adjusted basis is the total of the following three items. Download 2010 tax forms Adjusted basis. Download 2010 tax forms Selling expenses. Download 2010 tax forms Depreciation recapture. Download 2010 tax forms Adjusted basis. Download 2010 tax forms   Basis is your investment in the property for installment sale purposes. Download 2010 tax forms The way you figure basis depends on how you acquire the property. Download 2010 tax forms The basis of property you buy is generally its cost. Download 2010 tax forms The basis of property you inherit, receive as a gift, build yourself, or receive in a tax-free exchange is figured differently. Download 2010 tax forms   While you own property, various events may change your original basis. Download 2010 tax forms Some events, such as adding rooms or making permanent improvements, increase basis. Download 2010 tax forms Others, such as deductible casualty losses or depreciation previously allowed or allowable, decrease basis. Download 2010 tax forms The result is adjusted basis. Download 2010 tax forms See chapter 6 and Publication 551, Basis of Assets, for more information. Download 2010 tax forms Selling expenses. Download 2010 tax forms   Selling expenses relate to the sale of the property. Download 2010 tax forms They include commissions, attorney fees, and any other expenses paid on the sale. Download 2010 tax forms Selling expenses are added to the basis of the sold property. Download 2010 tax forms Depreciation recapture. Download 2010 tax forms   If the property you sold was depreciable property, you may need to recapture part of the gain on the sale as ordinary income. Download 2010 tax forms See Depreciation Recapture in chapter 9 and Depreciation Recapture Income in Publication 537. Download 2010 tax forms Gross profit. Download 2010 tax forms   Gross profit is the total gain you report on the installment method. Download 2010 tax forms   To figure your gross profit, subtract your adjusted basis for installment sale purposes from the selling price. Download 2010 tax forms If the property you sold was your home, subtract from the gross profit any gain you can exclude. Download 2010 tax forms Contract price. Download 2010 tax forms   Contract price equals: The selling price, minus The mortgages, debts, and other liabilities assumed or taken by the buyer, plus The amount by which the mortgages, debts, and other liabilities assumed or taken by the buyer exceed your adjusted basis for installment sale purposes. Download 2010 tax forms Gross profit percentage. Download 2010 tax forms   A certain percentage of each payment (after subtracting interest) is reported as installment sale income. Download 2010 tax forms This percentage is called the gross profit percentage and is figured by dividing your gross profit from the sale by the contract price. Download 2010 tax forms   The gross profit percentage generally remains the same for each payment you receive. Download 2010 tax forms However, see the example under Selling price reduced , later, for a situation where the gross profit percentage changes. Download 2010 tax forms Amount to report as installment sale income. Download 2010 tax forms   Multiply the payments you receive each year (less interest) by the gross profit percentage. Download 2010 tax forms The result is your installment sales income for the tax year. Download 2010 tax forms In certain circumstances, you may be treated as having received a payment, even though you received nothing directly. Download 2010 tax forms A receipt of property or the assumption of a mortgage on the property sold may be treated as a payment. Download 2010 tax forms For a detailed discussion, see Payments Received or Considered Received , later. Download 2010 tax forms Selling price reduced. Download 2010 tax forms   If the selling price is reduced at a later date, the gross profit on the sale also will change. Download 2010 tax forms You then must refigure the gross profit percentage for the remaining payments. Download 2010 tax forms Refigure your gross profit using Worksheet 10-2. Download 2010 tax forms New Gross Profit Percentage — Selling Price Reduced. Download 2010 tax forms You will spread any remaining gain over future installments. Download 2010 tax forms    Worksheet 10-2. Download 2010 tax forms New Gross Profit Percentage — Selling Price Reduced 1. Download 2010 tax forms Enter the reduced selling  price for the property   2. Download 2010 tax forms Enter your adjusted  basis for the  property     3. Download 2010 tax forms Enter your selling  expenses     4. Download 2010 tax forms Enter any depreciation  recapture     5. Download 2010 tax forms Add lines 2, 3, and 4. Download 2010 tax forms   6. Download 2010 tax forms Subtract line 5 from line 1. Download 2010 tax forms  This is your adjusted  gross profit   7. Download 2010 tax forms Enter any installment sale  income reported in  prior year(s)   8. Download 2010 tax forms Subtract line 7 from line 6   9. Download 2010 tax forms Future installments     10. Download 2010 tax forms Divide line 8 by line 9. Download 2010 tax forms  This is your new  gross profit percentage*. Download 2010 tax forms   * Apply this percentage to all future payments to determine how much of each of those payments is installment sale income. Download 2010 tax forms Example. Download 2010 tax forms In 2011, you sold land with a basis of $40,000 for $100,000. Download 2010 tax forms Your gross profit was $60,000. Download 2010 tax forms You received a $20,000 down payment and the buyer's note for $80,000. Download 2010 tax forms The note provides for monthly payments of $1,953 each, figured at 8% interest, amortized over four years, beginning in January 2012. Download 2010 tax forms Your gross profit percentage was 60%. Download 2010 tax forms You received the down payment of $20,000 in 2011 and total payments of $23,436 in 2012, of which $17,675 was principal and $5,761 was interest according to the amortization schedule. Download 2010 tax forms You reported a gain of $12,000 on the down payment received in 2011 and $10,605 ($17,675 X 60% (. Download 2010 tax forms 60)) in 2012. Download 2010 tax forms In January 2013, you and the buyer agreed to reduce the purchase price to $85,000 and payments during 2013, 2014, and 2015 are reduced to $1,483 a month amortized over the remaining three years. Download 2010 tax forms The new gross profit percentage, 47. Download 2010 tax forms 32%, is figured in Example — Worksheet 10-2. Download 2010 tax forms Example — Worksheet 10-2. Download 2010 tax forms New Gross Profit Percentage — Selling Price Reduced 1. Download 2010 tax forms Enter the reduced selling  price for the property 85,000 2. Download 2010 tax forms Enter your adjusted  basis for the  property 40,000   3. Download 2010 tax forms Enter your selling  expenses -0-   4. Download 2010 tax forms Enter any depreciation  recapture -0-   5. Download 2010 tax forms Add lines 2, 3, and 4. Download 2010 tax forms 40,000 6. Download 2010 tax forms Subtract line 5 from line 1. Download 2010 tax forms  This is your adjusted  gross profit 45,000 7. Download 2010 tax forms Enter any installment sale  income reported in  prior year(s) 22,605 8. Download 2010 tax forms Subtract line 7 from line 6 22,395 9. Download 2010 tax forms Future installments   47,325 10. Download 2010 tax forms Divide line 8 by line 9. Download 2010 tax forms  This is your new  gross profit percentage*. Download 2010 tax forms 47. Download 2010 tax forms 32% * Apply this percentage to all future payments to determine how much of each of those payments is installment sale income. Download 2010 tax forms You will report installment sale income of $6,878 (47. Download 2010 tax forms 32% of $14,535) in 2013, $7,449 (47. Download 2010 tax forms 32% of $15,742) in 2014, and $8,067 (47. Download 2010 tax forms 32% of $17,048) in 2015. Download 2010 tax forms Form 6252. Download 2010 tax forms   Use Form 6252 to report an installment sale in the year it takes place and to report payments received, or considered received because of related party resales, in later years. Download 2010 tax forms Attach it to your tax return for each year. Download 2010 tax forms Disposition of Installment Obligation If you are using the installment method and you dispose of the installment obligation, generally you will have a gain or loss to report. Download 2010 tax forms It is considered gain or loss on the sale of the property for which you received the installment obligation. Download 2010 tax forms Cancellation. Download 2010 tax forms   If an installment obligation is canceled or otherwise becomes unenforceable, it is treated as a disposition other than a sale or exchange. Download 2010 tax forms Your gain or loss is the difference between your basis in the obligation and its fair market value (FMV) at the time you cancel it. Download 2010 tax forms If the parties are related, the FMV of the obligation is considered to be no less than its full face value. Download 2010 tax forms Transfer due to death. Download 2010 tax forms   The transfer of an installment obligation (other than to a buyer) as a result of the death of the seller is not a disposition. Download 2010 tax forms Any unreported gain from the installment obligation is not treated as gross income to the decedent. Download 2010 tax forms No income is reported on the decedent's return due to the transfer. Download 2010 tax forms Whoever receives the installment obligation as a result of the seller's death is taxed on the installment payments the same as the seller would have been had the seller lived to receive the payments. Download 2010 tax forms   However, if the installment obligation is canceled, becomes unenforceable, or is transferred to the buyer because of the death of the holder of the obligation, it is a disposition. Download 2010 tax forms The estate must figure its gain or loss on the disposition. Download 2010 tax forms If the holder and the buyer were related, the FMV of the installment obligation is considered to be no less than its full face value. Download 2010 tax forms More information. Download 2010 tax forms   For more information on the disposition of an installment obligation, see Publication 537. Download 2010 tax forms Sale of depreciable property. Download 2010 tax forms   You generally cannot report gain from the sale of depreciable property to a related person on the installment method. Download 2010 tax forms See Sale to a Related Person in Publication 537. Download 2010 tax forms   You cannot use the installment method to report any depreciation recapture income up to the gain on the sale. Download 2010 tax forms However, report any gain greater than the recapture income on the installment method. Download 2010 tax forms   The recapture income reported in the year of sale is included in your installment sale basis to determine your gross profit on the installment sale. Download 2010 tax forms   Figure your depreciation recapture income (including the section 179 deduction and the section 179A deduction recapture) in Part III of Form 4797. Download 2010 tax forms Report the depreciation recapture income in Part II of Form 4797 as ordinary income in the year of sale. Download 2010 tax forms    If you sell depreciable business property, prepare Form 4797 first in order to figure the amount to enter on line 12 of Part I, Form 6252. Download 2010 tax forms See the Form 6252 instructions for details. Download 2010 tax forms   For more information on the section 179 deduction, see Section 179 Expense Deduction in chapter 7. Download 2010 tax forms For more information on depreciation recapture, see Depreciation Recapture in  chapter 9. Download 2010 tax forms Payments Received or Considered Received You must figure your gain each year on the payments you receive, or are treated as receiving, from an installment sale. Download 2010 tax forms In certain situations, you are considered to have received a payment, even though the buyer does not pay you directly. Download 2010 tax forms These situations occur when the buyer assumes or pays any of your debts, such as a loan, or pays any of your expenses, such as a sales commission. Download 2010 tax forms However, as discussed later, the buyer's assumption of your debt is treated as a recovery of basis, rather than as a payment, in many cases. Download 2010 tax forms Buyer pays seller's expenses. Download 2010 tax forms   If the buyer pays any of your expenses related to the sale of your property, it is considered a payment to you in the year of sale. Download 2010 tax forms Include these expenses in the selling and contract prices when figuring the gross profit percentage. Download 2010 tax forms Buyer assumes mortgage. Download 2010 tax forms   If the buyer assumes or pays off your mortgage, or otherwise takes the property subject to the mortgage, the following rules apply. Download 2010 tax forms Mortgage less than basis. Download 2010 tax forms   If the buyer assumes a mortgage that is not more than your installment sale basis in the property, it is not considered a payment to you. Download 2010 tax forms It is considered a recovery of your basis. Download 2010 tax forms The contract price is the selling price minus the mortgage. Download 2010 tax forms Example. Download 2010 tax forms You sell property with an adjusted basis of $19,000. Download 2010 tax forms You have selling expenses of $1,000. Download 2010 tax forms The buyer assumes your existing mortgage of $15,000 and agrees to pay you $10,000 (a cash down payment of $2,000 and $2,000 (plus 8% interest) in each of the next 4 years). Download 2010 tax forms The selling price is $25,000 ($15,000 + $10,000). Download 2010 tax forms Your gross profit is $5,000 ($25,000 − $20,000 installment sale basis). Download 2010 tax forms The contract price is $10,000 ($25,000 − $15,000 mortgage). Download 2010 tax forms Your gross profit percentage is 50% ($5,000 ÷ $10,000). Download 2010 tax forms You report half of each $2,000 payment received as gain from the sale. Download 2010 tax forms You also report all interest you receive as ordinary income. Download 2010 tax forms Mortgage more than basis. Download 2010 tax forms   If the buyer assumes a mortgage that is more than your installment sale basis in the property, you recover your entire basis. Download 2010 tax forms The part of the mortgage greater than your basis is treated as a payment received in the year of sale. Download 2010 tax forms   To figure the contract price, subtract the mortgage from the selling price. Download 2010 tax forms This is the total amount (other than interest) you will receive directly from the buyer. Download 2010 tax forms Add to this amount the payment you are considered to have received (the difference between the mortgage and your installment sale basis). Download 2010 tax forms The contract price is then the same as your gross profit from the sale. Download 2010 tax forms    If the mortgage the buyer assumes is equal to or more than your installment sale basis, the gross profit percentage always will be 100%. Download 2010 tax forms Example. Download 2010 tax forms The selling price for your property is $9,000. Download 2010 tax forms The buyer will pay you $1,000 annually (plus 8% interest) over the next 3 years and assume an existing mortgage of $6,000. Download 2010 tax forms Your adjusted basis in the property is $4,400. Download 2010 tax forms You have selling expenses of $600, for a total installment sale basis of $5,000. Download 2010 tax forms The part of the mortgage that is more than your installment sale basis is $1,000 ($6,000 − $5,000). Download 2010 tax forms This amount is included in the contract price and treated as a payment received in the year of sale. Download 2010 tax forms The contract price is $4,000: Selling price $9,000 Minus: Mortgage (6,000) Amount actually received $3,000 Add difference:   Mortgage $6,000   Minus: Installment sale basis 5,000 1,000 Contract price $4,000   Your gross profit on the sale is also $4,000: Selling price $9,000 Minus: Installment sale basis (5,000) Gross profit $4,000   Your gross profit percentage is 100%. Download 2010 tax forms Report 100% of each payment (less interest) as gain from the sale. Download 2010 tax forms Treat the $1,000 difference between the mortgage and your installment sale basis as a payment and report 100% of it as gain in the year of sale. Download 2010 tax forms Buyer assumes other debts. Download 2010 tax forms   If the buyer assumes any other debts, such as a loan or back taxes, it may be considered a payment to you in the year of sale. Download 2010 tax forms   If the buyer assumes the debt instead of paying it off, only part of it may have to be treated as a payment. Download 2010 tax forms Compare the debt to your installment sale basis in the property being sold. Download 2010 tax forms If the debt is less than your installment sale basis, none of it is treated as a payment. Download 2010 tax forms If it is more, only the difference is treated as a payment. Download 2010 tax forms If the buyer assumes more than one debt, any part of the total that is more than your installment sale basis is considered a payment. Download 2010 tax forms These rules are the same as the rules discussed earlier under Buyer assumes mortgage . Download 2010 tax forms However, they apply only to the following types of debt the buyer assumes. Download 2010 tax forms Those acquired from ownership of the property you are selling, such as a mortgage, lien, overdue interest, or back taxes. Download 2010 tax forms Those acquired in the ordinary course of your business, such as a balance due for inventory you purchased. Download 2010 tax forms   If the buyer assumes any other type of debt, such as a personal loan or your legal fees relating to the sale, it is treated as if the buyer had paid off the debt at the time of the sale. Download 2010 tax forms The value of the assumed debt is then considered a payment to you in the year of sale. Download 2010 tax forms Property used as a payment. Download 2010 tax forms   If you receive property rather than money from the buyer, it is still considered a payment in the year received. Download 2010 tax forms However, see Trading property for like-kind property , later. Download 2010 tax forms Generally, the amount of the payment is the property's FMV on the date you receive it. Download 2010 tax forms Exception. Download 2010 tax forms   If the property the buyer gives you is payable on demand or readily tradable (see examples later), the amount you should consider as payment in the year received is: The FMV of the property on the date you receive it if you use the cash method of accounting, The face amount of the obligation on the date you receive it if you use an accrual method of accounting, or The stated redemption price at maturity less any original issue discount (OID) or, if there is no OID, the stated redemption price at maturity appropriately discounted to reflect total unstated interest. Download 2010 tax forms See Unstated interest , later. Download 2010 tax forms Examples. Download 2010 tax forms If you receive a note from the buyer as payment, and the note stipulates that you can demand payment from the buyer at any time, the note is payable on demand. Download 2010 tax forms If you receive marketable securities from the buyer as payment, and you can sell the securities on an established securities market (such as the New York Stock Exchange) at any time, the securities are readily tradable. Download 2010 tax forms In these examples, use the above rules to determine the amount you should consider as payment in the year received. Download 2010 tax forms Debt not payable on demand. Download 2010 tax forms   Any evidence of debt you receive from the buyer that is not payable on demand is not considered a payment. Download 2010 tax forms This is true even if the debt is guaranteed by a third party, including a government agency. Download 2010 tax forms Fair market value (FMV). Download 2010 tax forms   This is the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having a reasonable knowledge of all the necessary facts. Download 2010 tax forms Third-party note. Download 2010 tax forms   If the property the buyer gives you is a third-party note (or other obligation of a third party), you are considered to have received a payment equal to the note's FMV. Download 2010 tax forms Because the FMV of the note is itself a payment on your installment sale, any payments you later receive from the third party are not considered payments on the sale. Download 2010 tax forms The excess of the note's face value over its FMV is interest. Download 2010 tax forms Exclude this interest in determining the selling price of the property. Download 2010 tax forms However, see Exception under Property used as a payment , earlier. Download 2010 tax forms Example. Download 2010 tax forms You sold real estate in an installment sale. Download 2010 tax forms As part of the down payment, the buyer assigned to you a $50,000, 8% third-party note. Download 2010 tax forms The FMV of the third-party note at the time of the sale was $30,000. Download 2010 tax forms This amount, not $50,000, is a payment to you in the year of sale. Download 2010 tax forms The third-party note had an FMV equal to 60% of its face value ($30,000 ÷ $50,000), so 60% of each principal payment you receive on this note is a nontaxable return of capital. Download 2010 tax forms The remaining 40% is interest taxed as ordinary income. Download 2010 tax forms Bond. Download 2010 tax forms   A bond or other evidence of debt you receive from the buyer that is payable on demand or readily tradable in an established securities market is treated as a payment in the year you receive it. Download 2010 tax forms For more information on the amount you should treat as a payment, see Exception under Property used as a payment , earlier. Download 2010 tax forms   If you receive a government or corporate bond for a sale before October 22, 2004, and the bond has interest coupons attached or can be readily traded in an established securities market, you are considered to have received payment equal to the bond's FMV. Download 2010 tax forms However, see Exception under Property used as a payment , earlier. Download 2010 tax forms Buyer's note. Download 2010 tax forms   The buyer's note (unless payable on demand) is not considered payment on the sale. Download 2010 tax forms However, its full face value is included when figuring the selling price and the contract price. Download 2010 tax forms Payments you receive on the note are used to figure your gain in the year received. Download 2010 tax forms Sale to a related person. Download 2010 tax forms   If you sell depreciable property to a related person and the sale is an installment sale, you may not be able to report the sale using the installment method. Download 2010 tax forms For information on these rules, see the Instructions for Form 6252 and Sale to a Related Person in Publication 537. Download 2010 tax forms Trading property for like-kind property. Download 2010 tax forms   If you trade business or investment property solely for the same kind of property to be held as business or investment property, you can postpone reporting the gain. Download 2010 tax forms See Like-Kind Exchanges in chapter 8 for a discussion of like-kind property. Download 2010 tax forms   If, in addition to like-kind property, you receive an installment obligation in the exchange, the following rules apply to determine installment sale income each year. Download 2010 tax forms The contract price is reduced by the FMV of the like-kind property received in the trade. Download 2010 tax forms The gross profit is reduced by any gain on the trade that can be postponed. Download 2010 tax forms Like-kind property received in the trade is not considered payment on the installment obligation. Download 2010 tax forms Unstated interest. Download 2010 tax forms   An installment sale contract may provide that each deferred payment on the sale will include interest or that there will be an interest payment in addition to the principal payment. Download 2010 tax forms Interest provided in the contract is called stated interest. Download 2010 tax forms   If an installment sale contract does not provide for adequate stated interest, part of the stated principal amount of the contract may be recharacterized as interest. Download 2010 tax forms If Internal Revenue Code section 483 applies to the contract, this interest is called unstated interest. Download 2010 tax forms   If Internal Revenue Code section 1274 applies to the contract, this interest is called original issue discount (OID). Download 2010 tax forms   Generally, if a buyer gives a debt in consideration for personal use property, the unstated interest rules do not apply. Download 2010 tax forms Therefore, the buyer cannot deduct the unstated interest. Download 2010 tax forms The seller must report the unstated interest as income. Download 2010 tax forms Personal-use property is any property in which substantially all of its use by the buyer is not in connection with a trade or business or an investment activity. Download 2010 tax forms   If the debt is subject to the Internal Revenue Code section 483 rules and is also subject to the below-market loan rules, such as a gift loan, compensation-related loan or corporation-shareholder loan, then both parties are subject to the below-market loan rules rather than the unstated interest rules. Download 2010 tax forms   Unstated interest reduces the stated selling price of the property and the buyer's basis in the property. Download 2010 tax forms It increases the seller's interest income and the buyer's interest expense. Download 2010 tax forms   In general, an installment sale contract provides for adequate stated interest if the stated interest rate (based on an appropriate compounding period) is at least equal to the applicable federal rate (AFR). Download 2010 tax forms    The AFRs are published monthly in the Internal Revenue Bulletin (IRB). Download 2010 tax forms You can get this information by contacting an IRS office. Download 2010 tax forms IRBs are also available at IRS. Download 2010 tax forms gov. Download 2010 tax forms More information. Download 2010 tax forms   For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. Download 2010 tax forms Example. Download 2010 tax forms You sell property at a contract price of $6,000 and your gross profit is $1,500. Download 2010 tax forms Your gross profit percentage is 25% ($1,500 ÷ $6,000). Download 2010 tax forms After subtracting interest, you report 25% of each payment, including the down payment, as installment sale income from the sale for the tax year you receive the payment. Download 2010 tax forms The remainder (balance) of each payment is the tax-free return of your adjusted basis. Download 2010 tax forms Example On January 3, 2013, you sold your farm, including the home, farm land and buildings. Download 2010 tax forms You received $50,000 down and the buyer's note for $200,000. Download 2010 tax forms In addition, the buyer assumed an outstanding $50,000 mortgage on the farm land. Download 2010 tax forms The total selling price was $300,000. Download 2010 tax forms The note payments of $25,000 each, plus adequate interest, are due every July 1 and January 1, beginning in July 2013. Download 2010 tax forms Your selling expenses were $15,000. Download 2010 tax forms Adjusted basis and depreciation. Download 2010 tax forms   The adjusted basis and depreciation claimed on each asset sold are as follows:   Depreciation Adjusted Asset Claimed Basis Home* -0- $33,743 Farm land -0- 73,610 Buildings $31,500 35,130 * Owned and used as main home for at least 2 of the 5 years prior to the sale Gain on each asset. Download 2010 tax forms   The following schedule shows the assets included in the sale, each asset's selling price based on its respective value, the selling expense allocated to each asset, the adjusted basis of each asset, and the gain on each asset. Download 2010 tax forms The selling expense for each asset is 5% of the selling price ($15,000 selling expense ÷ $300,000 selling price). Download 2010 tax forms   Selling Selling Adjusted     Price Expense Basis Gain Home* $60,000 $3,000 $33,743 $23,257 Farm land  165,000  8,250  73,610  83,140 Buildings 75,000 3,750 35,130 36,120   $300,000 $15,000 $142,483 $142,517 * Owned and used as main home for at least 2 of the 5 years prior to the sale Depreciation recapture. Download 2010 tax forms   The buildings are section 1250 property. Download 2010 tax forms There is no depreciation recapture income for them because they were depreciated using the straight line method. Download 2010 tax forms See chapter 9 for more information on depreciation recapture. Download 2010 tax forms   Special rules may apply when you sell section 1250 assets depreciated under the straight line method. Download 2010 tax forms See the Unrecaptured Section 1250 Gain Worksheet in the Instructions for Schedule D (Form 1040). Download 2010 tax forms See chapter 3 of Publication 544, Sales and Other Dispositions of Assets, for more information on section 1250 assets. Download 2010 tax forms Installment sale basis and gross profit. Download 2010 tax forms   The following table shows each asset reported on the installment method, its selling price, installment sale basis, and gross profit. Download 2010 tax forms     Installment     Selling Sale Gross   Price Basis Profit Farm land $165,000 $73,610 $83,140 Buildings 75,000 35,130 36,120   $240,000 $108,740 $119,260 Section 1231 gains. Download 2010 tax forms   The gain on the farm land and buildings is reported as section 1231 gains. Download 2010 tax forms See Section 1231 Gains and Losses in chapter 9. Download 2010 tax forms Contract price and gross profit percentage. Download 2010 tax forms   The contract price is $250,000 for the part of the sale reported on the installment method. Download 2010 tax forms This is the selling price ($300,000) minus the mortgage assumed ($50,000). Download 2010 tax forms   Gross profit percentage for the sale is 47. Download 2010 tax forms 70% ($119,260 gross profit ÷ $250,000 contract price). Download 2010 tax forms The gross profit percentage for each asset is figured as follows:   Percent Farm land ($83,140 ÷ $250,000) 33. Download 2010 tax forms 256 Buildings ($36,120 ÷ $250,000) 14. Download 2010 tax forms 448 Total 47. Download 2010 tax forms 70 Figuring the gain to report on the installment method. Download 2010 tax forms   One hundred percent (100%) of each payment is reported on the installment method. Download 2010 tax forms The total amount received on the sale in 2013 is $75,000 ($50,000 down payment + $25,000 payment on July 1). Download 2010 tax forms The installment sale part of the total payments received in 2013 is also $75,000. Download 2010 tax forms Figure the gain to report for each asset by multiplying its gross profit percentage times $75,000. Download 2010 tax forms   Income Farm land—33. Download 2010 tax forms 256% × $75,000 $24,942 Buildings—14. Download 2010 tax forms 448% × $75,000 10,836 Total installment income for 2013 $35,778 Reporting the sale. Download 2010 tax forms   Report the installment sale on Form 6252. Download 2010 tax forms Then report the amounts from Form 6252 on Form 4797 and Schedule D (Form 1040). Download 2010 tax forms Attach a separate page to Form 6252 that shows the computations in the example. Download 2010 tax forms If you sell depreciable business property, prepare Form 4797 first in order to figure the amount to enter on line 12 of Part I, Form 6252. Download 2010 tax forms Section 1231 gains. Download 2010 tax forms   The gains on the farm land and buildings are section 1231 gains. Download 2010 tax forms They may be reported as either capital or ordinary gain depending on the net balance when combined with other section 1231 losses. Download 2010 tax forms A net 1231 gain is capital gain and a net 1231 loss is an ordinary loss. Download 2010 tax forms Installment income for years after 2013. Download 2010 tax forms   You figure installment income for the years after 2013 by applying the same gross profit percentages to the payments you receive each year. Download 2010 tax forms If you receive $50,000 during the year, the entire $50,000 is considered received on the installment sale (100% × $50,000). Download 2010 tax forms You realize income as follows:   Income Farm land—33. Download 2010 tax forms 256% × $50,000 $16,628 Buildings—14. Download 2010 tax forms 448% × $50,000 7,224 Total installment income $23,852   In this example, no gain ever is recognized from the sale of your home. Download 2010 tax forms You will combine your section 1231 gains from this sale with section 1231 gains and losses from other sales in each of the later years to determine whether to report them as ordinary or capital gains. Download 2010 tax forms The interest received with each payment will be included in full as ordinary income. Download 2010 tax forms Summary. Download 2010 tax forms   The installment income (rounded to the nearest dollar) from the sale of the farm is reported as follows: Selling price $190,000 Minus: Installment basis (108,740) Gross profit $81,260     Gain reported in 2012 (year of sale) $35,778 Gain reported in 2013:   $50,000 × 47. Download 2010 tax forms 70% 23,850 Gain reported in 2014:   $50,000 × 47. Download 2010 tax forms 70% 23,850 Gain reported in 2015:   $50,000 × 47. Download 2010 tax forms 70% 23,850 Gain reported in 2016:   $25,000 × 47. Download 2010 tax forms 70% 11,925 Total gain reported $119,253 Prev  Up  Next   Home   More Online Publications