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Form 1040x 2012 Irs

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Form 1040x 2012 Irs

Form 1040x 2012 irs Index A Abandonments, Abandonments Annuities, Insurance Policies and Annuities Asset classification Capital, Capital Assets Noncapital, Noncapital Assets Assistance (see Tax help) Assumption of liabilities, Assumption of liabilities. Form 1040x 2012 irs , Liabilities. Form 1040x 2012 irs B Basis Adjusted, Adjusted basis. Form 1040x 2012 irs Original, Basis. Form 1040x 2012 irs Bonds, U. Form 1040x 2012 irs S. Form 1040x 2012 irs Treasury, U. Form 1040x 2012 irs S. Form 1040x 2012 irs Treasury Notes or Bonds Business, sold, Sale of a Business C Canceled Debt, Cancellation of debt. Form 1040x 2012 irs Lease, Cancellation of a lease. Form 1040x 2012 irs Real property sale, Canceling a sale of real property. Form 1040x 2012 irs Capital assets defined, Capital Assets Capital gains and losses Figuring, Long and Short Term Holding period, Holding period. Form 1040x 2012 irs Long term, Long and Short Term Short term, Long and Short Term Treatment of capital losses, Treatment of Capital Losses Casualties, Section 1231 transactions. Form 1040x 2012 irs Charitable organization Bargain sale to, Bargain sales to charity. Form 1040x 2012 irs , Bargain sale to charity. Form 1040x 2012 irs Gift to, Gift to charitable organization. Form 1040x 2012 irs Classes of assets, Classes of assets. Form 1040x 2012 irs Coal, Coal and Iron Ore Coins, Precious Metals and Stones, Stamps, and Coins Comments, Comments and suggestions. Form 1040x 2012 irs Commodities derivative financial instruments, Commodities derivative financial instrument. Form 1040x 2012 irs Condemnations, Condemnations, Section 1231 transactions. Form 1040x 2012 irs Conversion transactions, Conversion Transactions Copyrights, Copyright. Form 1040x 2012 irs , Copyrights. Form 1040x 2012 irs Covenant not to compete, Covenant not to compete. Form 1040x 2012 irs D Debt cancellation, Cancellation of debt. Form 1040x 2012 irs , Cancellation of debt. Form 1040x 2012 irs Deferred exchange, Deferred Exchange Depreciable property Real, Depreciable real property. Form 1040x 2012 irs Records, Depreciation Recapture Section 1245, Section 1245 property defined. Form 1040x 2012 irs , Like-Kind Exchanges and Involuntary Conversions Section 1250, Section 1250 property defined. Form 1040x 2012 irs Depreciation recapture Personal property, Section 1245 Property Real property, Section 1250 property defined. Form 1040x 2012 irs E Easement, Easement. Form 1040x 2012 irs Exchanges Deferred, Deferred Exchange Involuntary, Involuntary Conversions Like-kind, Like-Kind Exchanges, Like-Kind Exchanges and Involuntary Conversions Nontaxable, Nontaxable Exchanges Related persons, Related persons. Form 1040x 2012 irs U. Form 1040x 2012 irs S. Form 1040x 2012 irs Treasury notes or bonds, U. Form 1040x 2012 irs S. Form 1040x 2012 irs Treasury Notes or Bonds F Fair market value, Fair market value. Form 1040x 2012 irs Foreclosure, Foreclosures and Repossessions Form 1040 (Sch. Form 1040x 2012 irs D), Schedule D and Form 8949 1099-A, Forms 1099-A and 1099-C. Form 1040x 2012 irs , Forms 1099-A and 1099-C. Form 1040x 2012 irs 1099-B, Form 1099-B. Form 1040x 2012 irs 1099-C, Forms 1099-A and 1099-C. Form 1040x 2012 irs , Forms 1099-A and 1099-C. Form 1040x 2012 irs 1099-S, Form 1099-S. Form 1040x 2012 irs 4797, Business property. Form 1040x 2012 irs , Reporting the exchange. Form 1040x 2012 irs , Form 4797 8594, Reporting requirement. Form 1040x 2012 irs 8824, Reporting the exchange. Form 1040x 2012 irs 8949, Forms to file. Form 1040x 2012 irs , Personal-use property. Form 1040x 2012 irs , Reporting the exchange. Form 1040x 2012 irs , More information. Form 1040x 2012 irs , Timber, Introduction, Form 1099-B. Form 1040x 2012 irs , Personal-use property. Form 1040x 2012 irs , Mark-to-market election. Form 1040x 2012 irs Franchise, Franchise, Trademark, or Trade Name Free tax services, Free help with your tax return. Form 1040x 2012 irs G Gains and losses Bargain sale, Bargain Sale Business property, Ordinary or Capital Gain or Loss for Business Property Defined, Gain or Loss From Sales and Exchanges Form 4797, Form 4797 Ordinary or capital, Ordinary or Capital Gain or Loss Property changed to business or rental use, Property Changed to Business or Rental Use Property used partly for rental, Property Used Partly for Business or Rental Reporting, Reporting Gains and Losses Gifts of property, Gifts, Gift. Form 1040x 2012 irs Gold, Precious Metals and Stones, Stamps, and Coins H Hedging transactions, Hedging transaction. Form 1040x 2012 irs Help (see Tax help) Holding period, Holding period. Form 1040x 2012 irs Housing, low income, Low-income housing. Form 1040x 2012 irs , Low-Income Housing With Two or More Elements I Indirect ownership of stock, Ownership of stock or partnership interests. Form 1040x 2012 irs Information returns, Information Returns Inherited property, Inherited property. Form 1040x 2012 irs Installment sales, Installment Sales, Installment sale. Form 1040x 2012 irs Insurance policies, Insurance Policies and Annuities Intangible property, Dispositions of Intangible Property Involuntary conversion Defined, Involuntary Conversions Depreciable property, Like-Kind Exchanges and Involuntary Conversions Iron ore, Coal and Iron Ore L Land Release of restriction, Release of restriction on land. Form 1040x 2012 irs Subdivision, Subdivision of Land Lease, cancellation of, Cancellation of a lease. Form 1040x 2012 irs Liabilities, assumption, Liabilities. Form 1040x 2012 irs Like-kind exchanges Deferred, Deferred Exchange Liabilities, assumed, Assumption of liabilities. Form 1040x 2012 irs Like-class property, Like-Kind Property Like-kind property, Like-Kind Property Multiple parties, Multiple-party transactions. Form 1040x 2012 irs Multiple property, Multiple Property Exchanges Partnership interests, Partnership Interests Qualifying property, Qualifying Property Related persons, Like-Kind Exchanges Between Related Persons Low-income housing, Low-income housing. Form 1040x 2012 irs M Multiple property exchanges, Multiple Property Exchanges N Noncapital assets defined, Noncapital Assets Nontaxable exchanges Like-kind, Like-Kind Exchanges Other nontaxable exchanges, Other Nontaxable Exchanges Partially, Partially Nontaxable Exchanges Property exchanged for stock, Property Exchanged for Stock Notes, U. Form 1040x 2012 irs S. Form 1040x 2012 irs Treasury, U. Form 1040x 2012 irs S. Form 1040x 2012 irs Treasury Notes or Bonds O Ordinary or capital gain, Ordinary or Capital Gain or Loss P Partially nontaxable exchanges, Partially Nontaxable Exchanges Partnership Controlled, Controlled partnership transaction. Form 1040x 2012 irs Related persons, Related persons. Form 1040x 2012 irs , Controlled entity. Form 1040x 2012 irs Sale or exchange of interest, Partnership Interests, Partnership interests. Form 1040x 2012 irs , Partnership interests. Form 1040x 2012 irs Patents, Patents Personal property Depreciable, Like-Kind Exchanges and Involuntary Conversions Gains and losses, Personal-use property. Form 1040x 2012 irs Transfer at death, Transfers at Death Precious metals and stones, Precious Metals and Stones, Stamps, and Coins Property used partly for business or rental, Property Used Partly for Business or Rental, Part business or rental. Form 1040x 2012 irs Publications (see Tax help) Publicly traded securities, rollover of gain from, Rollover of Gain From Publicly Traded Securities R Real property Depreciable, Depreciable real property. Form 1040x 2012 irs Transfer at death, Transfers at Death Related persons, Sales and Exchanges Between Related Persons Condemned property replacement, bought from, Buying replacement property from a related person. Form 1040x 2012 irs Gain on sale of property, Sales and Exchanges Between Related Persons Like-kind exchanges between, Like-Kind Exchanges Between Related Persons List, Related persons. Form 1040x 2012 irs Loss on sale of property, Nondeductible Loss Patent transferred to, Related persons. Form 1040x 2012 irs Replacement property, Replacement property. Form 1040x 2012 irs , Replacement property to be produced. Form 1040x 2012 irs Repossession, Foreclosures and Repossessions, Repossession. Form 1040x 2012 irs Residual method, sale of business, Residual method. Form 1040x 2012 irs Rollover of gain, Rollover of Gain From Publicly Traded Securities S Sale of a business, Sale of a Business Sales Bargain, charitable organization, Bargain sales to charity. Form 1040x 2012 irs , Bargain sale to charity. Form 1040x 2012 irs Installment, Installment Sales, Installment sale. Form 1040x 2012 irs Property changed to business or rental use, Property Changed to Business or Rental Use Related persons, Sales and Exchanges Between Related Persons, Related persons. Form 1040x 2012 irs Section 1231 gains and losses, Section 1231 Gains and Losses Section 1245 property Defined, Section 1245 Property Gain, ordinary income, Gain Treated as Ordinary Income Multiple asset accounts, Multiple asset accounts. Form 1040x 2012 irs Section 1250 property Additional depreciation, Additional Depreciation Defined, Section 1250 property defined. Form 1040x 2012 irs Foreclosure, Foreclosure. Form 1040x 2012 irs Gain, ordinary income, Gain Treated as Ordinary Income Nonresidential, Nonresidential real property. Form 1040x 2012 irs Residential, Residential rental property. Form 1040x 2012 irs Section 197 intangibles, Section 197 Intangibles Severance damages, Severance damages. Form 1040x 2012 irs Silver, Precious Metals and Stones, Stamps, and Coins Small business stock, Gains on Sales of Qualified Small Business Stock Specialized small business investment company (SSBIC), rollover of gain into, Rollover of Gain From Publicly Traded Securities Stamps, Precious Metals and Stones, Stamps, and Coins Stock Capital asset, Capital Assets Controlling interest, corporation, Controlling interest in a corporation. Form 1040x 2012 irs Indirect ownership, Ownership of stock or partnership interests. Form 1040x 2012 irs Property exchanged for, Property Exchanged for Stock Publicly traded securities, Rollover of Gain From Publicly Traded Securities Small business, Gains on Sales of Qualified Small Business Stock Suggestions, Comments and suggestions. Form 1040x 2012 irs T Tax help, How To Get Tax Help Tax rates, capital gain, Capital Gains Tax Rates Thefts, Section 1231 transactions. Form 1040x 2012 irs Timber, Timber, Section 1231 transactions. Form 1040x 2012 irs Trade name, Franchise, Trademark, or Trade Name Trademark, Franchise, Trademark, or Trade Name Transfers to spouse, Transfers to Spouse U U. Form 1040x 2012 irs S. Form 1040x 2012 irs Treasury bonds, U. Form 1040x 2012 irs S. Form 1040x 2012 irs Treasury Notes or Bonds Unharvested crops, Section 1231 transactions. Form 1040x 2012 irs Prev  Up     Home   More Online Publications
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The Form 1040x 2012 Irs

Form 1040x 2012 irs 10. Form 1040x 2012 irs   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. Form 1040x 2012 irs Revoking the election. Form 1040x 2012 irs More information. Form 1040x 2012 irs Figuring Installment Sale Income Payments Received or Considered Received ExampleSection 1231 gains. Form 1040x 2012 irs Summary. Form 1040x 2012 irs Introduction An installment sale is a sale of property where you receive at least one payment after the tax year of the sale. Form 1040x 2012 irs If you realize a gain on an installment sale, you may be able to report part of your gain when you receive each payment. Form 1040x 2012 irs This method of reporting gain is called the installment method. Form 1040x 2012 irs You cannot use the installment method to report a loss. Form 1040x 2012 irs You can choose to report all of your gain in the year of sale. Form 1040x 2012 irs Installment obligation. Form 1040x 2012 irs   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. Form 1040x 2012 irs 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. Form 1040x 2012 irs 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. Form 1040x 2012 irs It generally includes the sale of real property and personal property reportable on the installment method. Form 1040x 2012 irs It may also include the sale of property for which you must maintain an inventory, which cannot be reported on the installment method. Form 1040x 2012 irs See Inventory , later. Form 1040x 2012 irs The selling price must be allocated to determine the amount received for each class of asset. Form 1040x 2012 irs 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. Form 1040x 2012 irs (See chapter 8 for a discussion of capital assets and chapter 9 for a discussion of property used in the business. Form 1040x 2012 irs ) Separate computations must be made to figure the gain or loss for each class of asset sold. Form 1040x 2012 irs See Sale of a Farm in chapter 8. Form 1040x 2012 irs 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. Form 1040x 2012 irs See Depreciation recapture , later. Form 1040x 2012 irs This applies even if no payments are received in that year. Form 1040x 2012 irs Installment Method An installment sale is a sale of property where you receive at least one payment after the tax year of the sale. Form 1040x 2012 irs 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. Form 1040x 2012 irs See Inventory , later, for information on the sale of farm property where inventory items are included in the assets sold. Form 1040x 2012 irs 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. Form 1040x 2012 irs Electing out of the installment method. Form 1040x 2012 irs   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. Form 1040x 2012 irs   To make this election, do not report your sale on Form 6252. Form 1040x 2012 irs Instead, report it on Schedule D (Form 1040), Form 4797, or both. Form 1040x 2012 irs When to elect out. Form 1040x 2012 irs   Make this election by the due date, including extensions, for filing your tax return for the year the sale takes place. Form 1040x 2012 irs   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). Form 1040x 2012 irs Write “Filed pursuant to section 301. Form 1040x 2012 irs 9100-2” at the top of the amended return and file it where the original return was filed. Form 1040x 2012 irs Revoking the election. Form 1040x 2012 irs   Once made, the election can be revoked only with IRS approval. Form 1040x 2012 irs A revocation is retroactive. Form 1040x 2012 irs More information. Form 1040x 2012 irs   See Electing Out of the Installment Method in Publication 537 for more information. Form 1040x 2012 irs Inventory. Form 1040x 2012 irs   The sale of farm inventory items cannot be reported on the installment method. Form 1040x 2012 irs All gain or loss on their sale must be reported in the year of sale, even if you receive payment in later years. Form 1040x 2012 irs   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. Form 1040x 2012 irs If you do not, each payment must be allocated between the inventory and the other assets sold. Form 1040x 2012 irs Sale at a loss. Form 1040x 2012 irs   If your sale results in a loss, you cannot use the installment method. Form 1040x 2012 irs If the loss is on an installment sale of business assets, you can deduct it only in the tax year of sale. Form 1040x 2012 irs Figuring Installment Sale Income Each payment on an installment sale usually consists of the following three parts. Form 1040x 2012 irs Interest income. Form 1040x 2012 irs Return of your adjusted basis in the property. Form 1040x 2012 irs Gain on the sale. Form 1040x 2012 irs 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. Form 1040x 2012 irs You do not include in income the part that is the return of your basis in the property. Form 1040x 2012 irs Basis is the amount of your investment in the property for installment sale purposes. Form 1040x 2012 irs Interest income. Form 1040x 2012 irs   You must report interest as ordinary income. Form 1040x 2012 irs Interest is generally not included in a down payment. Form 1040x 2012 irs 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. Form 1040x 2012 irs Interest provided in the agreement is called stated interest. Form 1040x 2012 irs If the agreement does not provide for enough stated interest, there may be unstated interest or original issue discount. Form 1040x 2012 irs See Unstated interest , later. Form 1040x 2012 irs    You must continue to report the interest income on payments you receive in subsequent years as interest income. Form 1040x 2012 irs Adjusted basis and installment sale income (gain on sale). Form 1040x 2012 irs   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. Form 1040x 2012 irs A tax-free return of your adjusted basis in the property, and Your gain (referred to as “installment sale income” on Form 6252). Form 1040x 2012 irs Figuring adjusted basis for installment sale purposes. Form 1040x 2012 irs   You can use Worksheet 10-1 to figure your adjusted basis in the property for installment sale purposes. Form 1040x 2012 irs 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. Form 1040x 2012 irs    Worksheet 10-1. Form 1040x 2012 irs Figuring Adjusted Basis and Gross Profit Percentage 1. Form 1040x 2012 irs Enter the selling price for the property   2. Form 1040x 2012 irs Enter your adjusted basis for the property     3. Form 1040x 2012 irs Enter your selling expenses     4. Form 1040x 2012 irs Enter any depreciation recapture     5. Form 1040x 2012 irs Add lines 2, 3, and 4. Form 1040x 2012 irs  This is your adjusted basis  for installment sale purposes   6. Form 1040x 2012 irs Subtract line 5 from line 1. Form 1040x 2012 irs If zero or less, enter -0-. Form 1040x 2012 irs  This is your gross profit     If the amount entered on line 6 is zero, Stop here. Form 1040x 2012 irs You cannot use the installment method. Form 1040x 2012 irs   7. Form 1040x 2012 irs Enter the contract price for the property   8. Form 1040x 2012 irs Divide line 6 by line 7. Form 1040x 2012 irs This is your gross profit percentage   Selling price. Form 1040x 2012 irs   The selling price is the total cost of the property to the buyer and includes the following. Form 1040x 2012 irs Any money you are to receive. Form 1040x 2012 irs 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 ). Form 1040x 2012 irs 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). Form 1040x 2012 irs Any of your selling expenses the buyer pays. Form 1040x 2012 irs Do not include stated interest, unstated interest, any amount recomputed or recharacterized as interest, or original issue discount. Form 1040x 2012 irs Adjusted basis for installment sale purposes. Form 1040x 2012 irs   Your adjusted basis is the total of the following three items. Form 1040x 2012 irs Adjusted basis. Form 1040x 2012 irs Selling expenses. Form 1040x 2012 irs Depreciation recapture. Form 1040x 2012 irs Adjusted basis. Form 1040x 2012 irs   Basis is your investment in the property for installment sale purposes. Form 1040x 2012 irs The way you figure basis depends on how you acquire the property. Form 1040x 2012 irs The basis of property you buy is generally its cost. Form 1040x 2012 irs The basis of property you inherit, receive as a gift, build yourself, or receive in a tax-free exchange is figured differently. Form 1040x 2012 irs   While you own property, various events may change your original basis. Form 1040x 2012 irs Some events, such as adding rooms or making permanent improvements, increase basis. Form 1040x 2012 irs Others, such as deductible casualty losses or depreciation previously allowed or allowable, decrease basis. Form 1040x 2012 irs The result is adjusted basis. Form 1040x 2012 irs See chapter 6 and Publication 551, Basis of Assets, for more information. Form 1040x 2012 irs Selling expenses. Form 1040x 2012 irs   Selling expenses relate to the sale of the property. Form 1040x 2012 irs They include commissions, attorney fees, and any other expenses paid on the sale. Form 1040x 2012 irs Selling expenses are added to the basis of the sold property. Form 1040x 2012 irs Depreciation recapture. Form 1040x 2012 irs   If the property you sold was depreciable property, you may need to recapture part of the gain on the sale as ordinary income. Form 1040x 2012 irs See Depreciation Recapture in chapter 9 and Depreciation Recapture Income in Publication 537. Form 1040x 2012 irs Gross profit. Form 1040x 2012 irs   Gross profit is the total gain you report on the installment method. Form 1040x 2012 irs   To figure your gross profit, subtract your adjusted basis for installment sale purposes from the selling price. Form 1040x 2012 irs If the property you sold was your home, subtract from the gross profit any gain you can exclude. Form 1040x 2012 irs Contract price. Form 1040x 2012 irs   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. Form 1040x 2012 irs Gross profit percentage. Form 1040x 2012 irs   A certain percentage of each payment (after subtracting interest) is reported as installment sale income. Form 1040x 2012 irs This percentage is called the gross profit percentage and is figured by dividing your gross profit from the sale by the contract price. Form 1040x 2012 irs   The gross profit percentage generally remains the same for each payment you receive. Form 1040x 2012 irs However, see the example under Selling price reduced , later, for a situation where the gross profit percentage changes. Form 1040x 2012 irs Amount to report as installment sale income. Form 1040x 2012 irs   Multiply the payments you receive each year (less interest) by the gross profit percentage. Form 1040x 2012 irs The result is your installment sales income for the tax year. Form 1040x 2012 irs In certain circumstances, you may be treated as having received a payment, even though you received nothing directly. Form 1040x 2012 irs A receipt of property or the assumption of a mortgage on the property sold may be treated as a payment. Form 1040x 2012 irs For a detailed discussion, see Payments Received or Considered Received , later. Form 1040x 2012 irs Selling price reduced. Form 1040x 2012 irs   If the selling price is reduced at a later date, the gross profit on the sale also will change. Form 1040x 2012 irs You then must refigure the gross profit percentage for the remaining payments. Form 1040x 2012 irs Refigure your gross profit using Worksheet 10-2. Form 1040x 2012 irs New Gross Profit Percentage — Selling Price Reduced. Form 1040x 2012 irs You will spread any remaining gain over future installments. Form 1040x 2012 irs    Worksheet 10-2. Form 1040x 2012 irs New Gross Profit Percentage — Selling Price Reduced 1. Form 1040x 2012 irs Enter the reduced selling  price for the property   2. Form 1040x 2012 irs Enter your adjusted  basis for the  property     3. Form 1040x 2012 irs Enter your selling  expenses     4. Form 1040x 2012 irs Enter any depreciation  recapture     5. Form 1040x 2012 irs Add lines 2, 3, and 4. Form 1040x 2012 irs   6. Form 1040x 2012 irs Subtract line 5 from line 1. Form 1040x 2012 irs  This is your adjusted  gross profit   7. Form 1040x 2012 irs Enter any installment sale  income reported in  prior year(s)   8. Form 1040x 2012 irs Subtract line 7 from line 6   9. Form 1040x 2012 irs Future installments     10. Form 1040x 2012 irs Divide line 8 by line 9. Form 1040x 2012 irs  This is your new  gross profit percentage*. Form 1040x 2012 irs   * Apply this percentage to all future payments to determine how much of each of those payments is installment sale income. Form 1040x 2012 irs Example. Form 1040x 2012 irs In 2011, you sold land with a basis of $40,000 for $100,000. Form 1040x 2012 irs Your gross profit was $60,000. Form 1040x 2012 irs You received a $20,000 down payment and the buyer's note for $80,000. Form 1040x 2012 irs The note provides for monthly payments of $1,953 each, figured at 8% interest, amortized over four years, beginning in January 2012. Form 1040x 2012 irs Your gross profit percentage was 60%. Form 1040x 2012 irs 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. Form 1040x 2012 irs You reported a gain of $12,000 on the down payment received in 2011 and $10,605 ($17,675 X 60% (. Form 1040x 2012 irs 60)) in 2012. Form 1040x 2012 irs 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. Form 1040x 2012 irs The new gross profit percentage, 47. Form 1040x 2012 irs 32%, is figured in Example — Worksheet 10-2. Form 1040x 2012 irs Example — Worksheet 10-2. Form 1040x 2012 irs New Gross Profit Percentage — Selling Price Reduced 1. Form 1040x 2012 irs Enter the reduced selling  price for the property 85,000 2. Form 1040x 2012 irs Enter your adjusted  basis for the  property 40,000   3. Form 1040x 2012 irs Enter your selling  expenses -0-   4. Form 1040x 2012 irs Enter any depreciation  recapture -0-   5. Form 1040x 2012 irs Add lines 2, 3, and 4. Form 1040x 2012 irs 40,000 6. Form 1040x 2012 irs Subtract line 5 from line 1. Form 1040x 2012 irs  This is your adjusted  gross profit 45,000 7. Form 1040x 2012 irs Enter any installment sale  income reported in  prior year(s) 22,605 8. Form 1040x 2012 irs Subtract line 7 from line 6 22,395 9. Form 1040x 2012 irs Future installments   47,325 10. Form 1040x 2012 irs Divide line 8 by line 9. Form 1040x 2012 irs  This is your new  gross profit percentage*. Form 1040x 2012 irs 47. Form 1040x 2012 irs 32% * Apply this percentage to all future payments to determine how much of each of those payments is installment sale income. Form 1040x 2012 irs You will report installment sale income of $6,878 (47. Form 1040x 2012 irs 32% of $14,535) in 2013, $7,449 (47. Form 1040x 2012 irs 32% of $15,742) in 2014, and $8,067 (47. Form 1040x 2012 irs 32% of $17,048) in 2015. Form 1040x 2012 irs Form 6252. Form 1040x 2012 irs   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. Form 1040x 2012 irs Attach it to your tax return for each year. Form 1040x 2012 irs 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. Form 1040x 2012 irs It is considered gain or loss on the sale of the property for which you received the installment obligation. Form 1040x 2012 irs Cancellation. Form 1040x 2012 irs   If an installment obligation is canceled or otherwise becomes unenforceable, it is treated as a disposition other than a sale or exchange. Form 1040x 2012 irs 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. Form 1040x 2012 irs If the parties are related, the FMV of the obligation is considered to be no less than its full face value. Form 1040x 2012 irs Transfer due to death. Form 1040x 2012 irs   The transfer of an installment obligation (other than to a buyer) as a result of the death of the seller is not a disposition. Form 1040x 2012 irs Any unreported gain from the installment obligation is not treated as gross income to the decedent. Form 1040x 2012 irs No income is reported on the decedent's return due to the transfer. Form 1040x 2012 irs 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. Form 1040x 2012 irs   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. Form 1040x 2012 irs The estate must figure its gain or loss on the disposition. Form 1040x 2012 irs 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. Form 1040x 2012 irs More information. Form 1040x 2012 irs   For more information on the disposition of an installment obligation, see Publication 537. Form 1040x 2012 irs Sale of depreciable property. Form 1040x 2012 irs   You generally cannot report gain from the sale of depreciable property to a related person on the installment method. Form 1040x 2012 irs See Sale to a Related Person in Publication 537. Form 1040x 2012 irs   You cannot use the installment method to report any depreciation recapture income up to the gain on the sale. Form 1040x 2012 irs However, report any gain greater than the recapture income on the installment method. Form 1040x 2012 irs   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. Form 1040x 2012 irs   Figure your depreciation recapture income (including the section 179 deduction and the section 179A deduction recapture) in Part III of Form 4797. Form 1040x 2012 irs Report the depreciation recapture income in Part II of Form 4797 as ordinary income in the year of sale. Form 1040x 2012 irs    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. Form 1040x 2012 irs See the Form 6252 instructions for details. Form 1040x 2012 irs   For more information on the section 179 deduction, see Section 179 Expense Deduction in chapter 7. Form 1040x 2012 irs For more information on depreciation recapture, see Depreciation Recapture in  chapter 9. Form 1040x 2012 irs 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. Form 1040x 2012 irs In certain situations, you are considered to have received a payment, even though the buyer does not pay you directly. Form 1040x 2012 irs 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. Form 1040x 2012 irs 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. Form 1040x 2012 irs Buyer pays seller's expenses. Form 1040x 2012 irs   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. Form 1040x 2012 irs Include these expenses in the selling and contract prices when figuring the gross profit percentage. Form 1040x 2012 irs Buyer assumes mortgage. Form 1040x 2012 irs   If the buyer assumes or pays off your mortgage, or otherwise takes the property subject to the mortgage, the following rules apply. Form 1040x 2012 irs Mortgage less than basis. Form 1040x 2012 irs   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. Form 1040x 2012 irs It is considered a recovery of your basis. Form 1040x 2012 irs The contract price is the selling price minus the mortgage. Form 1040x 2012 irs Example. Form 1040x 2012 irs You sell property with an adjusted basis of $19,000. Form 1040x 2012 irs You have selling expenses of $1,000. Form 1040x 2012 irs 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). Form 1040x 2012 irs The selling price is $25,000 ($15,000 + $10,000). Form 1040x 2012 irs Your gross profit is $5,000 ($25,000 − $20,000 installment sale basis). Form 1040x 2012 irs The contract price is $10,000 ($25,000 − $15,000 mortgage). Form 1040x 2012 irs Your gross profit percentage is 50% ($5,000 ÷ $10,000). Form 1040x 2012 irs You report half of each $2,000 payment received as gain from the sale. Form 1040x 2012 irs You also report all interest you receive as ordinary income. Form 1040x 2012 irs Mortgage more than basis. Form 1040x 2012 irs   If the buyer assumes a mortgage that is more than your installment sale basis in the property, you recover your entire basis. Form 1040x 2012 irs The part of the mortgage greater than your basis is treated as a payment received in the year of sale. Form 1040x 2012 irs   To figure the contract price, subtract the mortgage from the selling price. Form 1040x 2012 irs This is the total amount (other than interest) you will receive directly from the buyer. Form 1040x 2012 irs Add to this amount the payment you are considered to have received (the difference between the mortgage and your installment sale basis). Form 1040x 2012 irs The contract price is then the same as your gross profit from the sale. Form 1040x 2012 irs    If the mortgage the buyer assumes is equal to or more than your installment sale basis, the gross profit percentage always will be 100%. Form 1040x 2012 irs Example. Form 1040x 2012 irs The selling price for your property is $9,000. Form 1040x 2012 irs The buyer will pay you $1,000 annually (plus 8% interest) over the next 3 years and assume an existing mortgage of $6,000. Form 1040x 2012 irs Your adjusted basis in the property is $4,400. Form 1040x 2012 irs You have selling expenses of $600, for a total installment sale basis of $5,000. Form 1040x 2012 irs The part of the mortgage that is more than your installment sale basis is $1,000 ($6,000 − $5,000). Form 1040x 2012 irs This amount is included in the contract price and treated as a payment received in the year of sale. Form 1040x 2012 irs 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%. Form 1040x 2012 irs Report 100% of each payment (less interest) as gain from the sale. Form 1040x 2012 irs 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. Form 1040x 2012 irs Buyer assumes other debts. Form 1040x 2012 irs   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. Form 1040x 2012 irs   If the buyer assumes the debt instead of paying it off, only part of it may have to be treated as a payment. Form 1040x 2012 irs Compare the debt to your installment sale basis in the property being sold. Form 1040x 2012 irs If the debt is less than your installment sale basis, none of it is treated as a payment. Form 1040x 2012 irs If it is more, only the difference is treated as a payment. Form 1040x 2012 irs 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. Form 1040x 2012 irs These rules are the same as the rules discussed earlier under Buyer assumes mortgage . Form 1040x 2012 irs However, they apply only to the following types of debt the buyer assumes. Form 1040x 2012 irs Those acquired from ownership of the property you are selling, such as a mortgage, lien, overdue interest, or back taxes. Form 1040x 2012 irs Those acquired in the ordinary course of your business, such as a balance due for inventory you purchased. Form 1040x 2012 irs   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. Form 1040x 2012 irs The value of the assumed debt is then considered a payment to you in the year of sale. Form 1040x 2012 irs Property used as a payment. Form 1040x 2012 irs   If you receive property rather than money from the buyer, it is still considered a payment in the year received. Form 1040x 2012 irs However, see Trading property for like-kind property , later. Form 1040x 2012 irs Generally, the amount of the payment is the property's FMV on the date you receive it. Form 1040x 2012 irs Exception. Form 1040x 2012 irs   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. Form 1040x 2012 irs See Unstated interest , later. Form 1040x 2012 irs Examples. Form 1040x 2012 irs 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. Form 1040x 2012 irs 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. Form 1040x 2012 irs In these examples, use the above rules to determine the amount you should consider as payment in the year received. Form 1040x 2012 irs Debt not payable on demand. Form 1040x 2012 irs   Any evidence of debt you receive from the buyer that is not payable on demand is not considered a payment. Form 1040x 2012 irs This is true even if the debt is guaranteed by a third party, including a government agency. Form 1040x 2012 irs Fair market value (FMV). Form 1040x 2012 irs   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. Form 1040x 2012 irs Third-party note. Form 1040x 2012 irs   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. Form 1040x 2012 irs 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. Form 1040x 2012 irs The excess of the note's face value over its FMV is interest. Form 1040x 2012 irs Exclude this interest in determining the selling price of the property. Form 1040x 2012 irs However, see Exception under Property used as a payment , earlier. Form 1040x 2012 irs Example. Form 1040x 2012 irs You sold real estate in an installment sale. Form 1040x 2012 irs As part of the down payment, the buyer assigned to you a $50,000, 8% third-party note. Form 1040x 2012 irs The FMV of the third-party note at the time of the sale was $30,000. Form 1040x 2012 irs This amount, not $50,000, is a payment to you in the year of sale. Form 1040x 2012 irs 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. Form 1040x 2012 irs The remaining 40% is interest taxed as ordinary income. Form 1040x 2012 irs Bond. Form 1040x 2012 irs   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. Form 1040x 2012 irs For more information on the amount you should treat as a payment, see Exception under Property used as a payment , earlier. Form 1040x 2012 irs   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. Form 1040x 2012 irs However, see Exception under Property used as a payment , earlier. Form 1040x 2012 irs Buyer's note. Form 1040x 2012 irs   The buyer's note (unless payable on demand) is not considered payment on the sale. Form 1040x 2012 irs However, its full face value is included when figuring the selling price and the contract price. Form 1040x 2012 irs Payments you receive on the note are used to figure your gain in the year received. Form 1040x 2012 irs Sale to a related person. Form 1040x 2012 irs   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. Form 1040x 2012 irs For information on these rules, see the Instructions for Form 6252 and Sale to a Related Person in Publication 537. Form 1040x 2012 irs Trading property for like-kind property. Form 1040x 2012 irs   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. Form 1040x 2012 irs See Like-Kind Exchanges in chapter 8 for a discussion of like-kind property. Form 1040x 2012 irs   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. Form 1040x 2012 irs The contract price is reduced by the FMV of the like-kind property received in the trade. Form 1040x 2012 irs The gross profit is reduced by any gain on the trade that can be postponed. Form 1040x 2012 irs Like-kind property received in the trade is not considered payment on the installment obligation. Form 1040x 2012 irs Unstated interest. Form 1040x 2012 irs   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. Form 1040x 2012 irs Interest provided in the contract is called stated interest. Form 1040x 2012 irs   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. Form 1040x 2012 irs If Internal Revenue Code section 483 applies to the contract, this interest is called unstated interest. Form 1040x 2012 irs   If Internal Revenue Code section 1274 applies to the contract, this interest is called original issue discount (OID). Form 1040x 2012 irs   Generally, if a buyer gives a debt in consideration for personal use property, the unstated interest rules do not apply. Form 1040x 2012 irs Therefore, the buyer cannot deduct the unstated interest. Form 1040x 2012 irs The seller must report the unstated interest as income. Form 1040x 2012 irs 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. Form 1040x 2012 irs   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. Form 1040x 2012 irs   Unstated interest reduces the stated selling price of the property and the buyer's basis in the property. Form 1040x 2012 irs It increases the seller's interest income and the buyer's interest expense. Form 1040x 2012 irs   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). Form 1040x 2012 irs    The AFRs are published monthly in the Internal Revenue Bulletin (IRB). Form 1040x 2012 irs You can get this information by contacting an IRS office. Form 1040x 2012 irs IRBs are also available at IRS. Form 1040x 2012 irs gov. Form 1040x 2012 irs More information. Form 1040x 2012 irs   For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. Form 1040x 2012 irs Example. Form 1040x 2012 irs You sell property at a contract price of $6,000 and your gross profit is $1,500. Form 1040x 2012 irs Your gross profit percentage is 25% ($1,500 ÷ $6,000). Form 1040x 2012 irs 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. Form 1040x 2012 irs The remainder (balance) of each payment is the tax-free return of your adjusted basis. Form 1040x 2012 irs Example On January 3, 2013, you sold your farm, including the home, farm land and buildings. Form 1040x 2012 irs You received $50,000 down and the buyer's note for $200,000. Form 1040x 2012 irs In addition, the buyer assumed an outstanding $50,000 mortgage on the farm land. Form 1040x 2012 irs The total selling price was $300,000. Form 1040x 2012 irs The note payments of $25,000 each, plus adequate interest, are due every July 1 and January 1, beginning in July 2013. Form 1040x 2012 irs Your selling expenses were $15,000. Form 1040x 2012 irs Adjusted basis and depreciation. Form 1040x 2012 irs   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. Form 1040x 2012 irs   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. Form 1040x 2012 irs The selling expense for each asset is 5% of the selling price ($15,000 selling expense ÷ $300,000 selling price). Form 1040x 2012 irs   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. Form 1040x 2012 irs   The buildings are section 1250 property. Form 1040x 2012 irs There is no depreciation recapture income for them because they were depreciated using the straight line method. Form 1040x 2012 irs See chapter 9 for more information on depreciation recapture. Form 1040x 2012 irs   Special rules may apply when you sell section 1250 assets depreciated under the straight line method. Form 1040x 2012 irs See the Unrecaptured Section 1250 Gain Worksheet in the Instructions for Schedule D (Form 1040). Form 1040x 2012 irs See chapter 3 of Publication 544, Sales and Other Dispositions of Assets, for more information on section 1250 assets. Form 1040x 2012 irs Installment sale basis and gross profit. Form 1040x 2012 irs   The following table shows each asset reported on the installment method, its selling price, installment sale basis, and gross profit. Form 1040x 2012 irs     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. Form 1040x 2012 irs   The gain on the farm land and buildings is reported as section 1231 gains. Form 1040x 2012 irs See Section 1231 Gains and Losses in chapter 9. Form 1040x 2012 irs Contract price and gross profit percentage. Form 1040x 2012 irs   The contract price is $250,000 for the part of the sale reported on the installment method. Form 1040x 2012 irs This is the selling price ($300,000) minus the mortgage assumed ($50,000). Form 1040x 2012 irs   Gross profit percentage for the sale is 47. Form 1040x 2012 irs 70% ($119,260 gross profit ÷ $250,000 contract price). Form 1040x 2012 irs The gross profit percentage for each asset is figured as follows:   Percent Farm land ($83,140 ÷ $250,000) 33. Form 1040x 2012 irs 256 Buildings ($36,120 ÷ $250,000) 14. Form 1040x 2012 irs 448 Total 47. Form 1040x 2012 irs 70 Figuring the gain to report on the installment method. Form 1040x 2012 irs   One hundred percent (100%) of each payment is reported on the installment method. Form 1040x 2012 irs The total amount received on the sale in 2013 is $75,000 ($50,000 down payment + $25,000 payment on July 1). Form 1040x 2012 irs The installment sale part of the total payments received in 2013 is also $75,000. Form 1040x 2012 irs Figure the gain to report for each asset by multiplying its gross profit percentage times $75,000. Form 1040x 2012 irs   Income Farm land—33. Form 1040x 2012 irs 256% × $75,000 $24,942 Buildings—14. Form 1040x 2012 irs 448% × $75,000 10,836 Total installment income for 2013 $35,778 Reporting the sale. Form 1040x 2012 irs   Report the installment sale on Form 6252. Form 1040x 2012 irs Then report the amounts from Form 6252 on Form 4797 and Schedule D (Form 1040). Form 1040x 2012 irs Attach a separate page to Form 6252 that shows the computations in the example. Form 1040x 2012 irs 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. Form 1040x 2012 irs Section 1231 gains. Form 1040x 2012 irs   The gains on the farm land and buildings are section 1231 gains. Form 1040x 2012 irs They may be reported as either capital or ordinary gain depending on the net balance when combined with other section 1231 losses. Form 1040x 2012 irs A net 1231 gain is capital gain and a net 1231 loss is an ordinary loss. Form 1040x 2012 irs Installment income for years after 2013. Form 1040x 2012 irs   You figure installment income for the years after 2013 by applying the same gross profit percentages to the payments you receive each year. Form 1040x 2012 irs If you receive $50,000 during the year, the entire $50,000 is considered received on the installment sale (100% × $50,000). Form 1040x 2012 irs You realize income as follows:   Income Farm land—33. Form 1040x 2012 irs 256% × $50,000 $16,628 Buildings—14. Form 1040x 2012 irs 448% × $50,000 7,224 Total installment income $23,852   In this example, no gain ever is recognized from the sale of your home. Form 1040x 2012 irs 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. Form 1040x 2012 irs The interest received with each payment will be included in full as ordinary income. Form 1040x 2012 irs Summary. Form 1040x 2012 irs   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. Form 1040x 2012 irs 70% 23,850 Gain reported in 2014:   $50,000 × 47. Form 1040x 2012 irs 70% 23,850 Gain reported in 2015:   $50,000 × 47. Form 1040x 2012 irs 70% 23,850 Gain reported in 2016:   $25,000 × 47. Form 1040x 2012 irs 70% 11,925 Total gain reported $119,253 Prev  Up  Next   Home   More Online Publications