how do i enter s1250 depreciation on form 6252

[DaveF1006]

To report Section 1250 depreciation on Form 6252 (Installment Sale Income), follow these steps. 

1. Open you TurboTax return.
2. Go to income
3. Less Common income
4. Installment Sales 

As you begin answering questions about your property, it will eventually ask you to enter the type of property it is. If it's residential real estate, you will show that and it'll eventually ask about depreciation. If you properly reported this sale in Schedule E or another Schedule, the recaptured depreciation will flow to your 6252. You will need to record this information in Schedule E before completing your 6252. This'll generate a form 4797 and then copy to your 6252. Here is how it should work if you enter the information directly on the forms instead of through the process I just described.

1. Calculate Recapture Amount: Determine the amount of depreciation recapture under Section 1250. This is the portion of the gain attributable to depreciation deductions taken on the property.
2. Complete Form 4797: Use Part III of Form 4797 (Sales of Business Property) to calculate the ordinary income recapture. The recapture amount is entered on Line 31 of Form 4797.
3. Enter on Form 6252 on Line 12 to report the recapture amount calculated on Form 4797.

Make sure this is reported correctly in your forms.

Publication 537 (2024), Installment Sales

[freewey]

It does not ask for depreciation. That is the problem. There is no schedule E. The house was sold in 2021. I tried entering on sale of property and got error saying sale date had to be 2024. No place to enter S1250 depreciation. Calculating tax at incorrect rate.

[Mike9241]

there is no separate line for 1250 deprecition. 

[KrisD15]

Depreciation Recapture needs to be claimed in the year of the sale. 

You would have needed to claim that in 2021 and use the installment method for the Capital Gain portion of the sale proceeds. 

According to the IRS:

"Situations where the installment method isn't permitted
Installment method rules don't apply to sales that result in a loss. You can't use the installment method to report gain from the sale of inventory or stocks and securities traded on an established securities market. You must report any portion of the gain from the sale of depreciable assets that's ordinary income under the depreciation recapture rules in the year of the sale. For additional situations and information about when you can't report payments on the installment method, see Publication 537, Installment Sales."
 

Additionally:

"If you sell property for which you claimed or could have claimed a depreciation deduction, you must report any depreciation recapture income in the year of sale, whether or not an installment payment was received that year. Figure your depreciation recapture income (including the section 179 deduction and the section 179A deduction recapture) in Part III of Form 4797. Report the recapture income in Part II of Form 4797 as ordinary income in the year of sale. The recapture income is also included in Part I of Form 6252. However, the gain equal to the recapture income is reported in full in the year of the sale. Only the gain greater than the recapture income is reported on the installment method. For more information on depreciation recapture, see chapter 3 of Pub. 544.

The recapture income reported in the year of sale is included in your installment sale basis in determining your gross profit on the installment sale. Determining gross profit is discussed under General Rules, earlier."
 

[freewey]

Your reply is incorrect. I am talking about unrecapured S1250 depreciation. It is allowed on 6252 installment sale,  taxed at ordinary rate until used up, then remainder of gain taxed at long term cap gain rate in future years. You are referring to recaptured 1250 which only applies if MACRS is not used for depreciation.  Trust me, I am an Enrolled agent and have used other software that does this correctly. Turbotax is incorrect.

[KrisD15]

I think Mike9241 is correct, 

for "Sale of Business Property"

select BOTH 

"Sales of business or rental property that you haven't already reported"

AND

"Sales of real estate, cars, or anything else for which you receive payments over two or more years"

The next screen should allow the entry for depreciation. 

@freewey 

[freewey]

I did exactly that and got error message saying date of sale MUST be in 2024. This sale WAS reported in a prior year. If you only check the box for prior year installment sales it never asks for depreciation. 

[AmeliesUncle]

Any chance you are using the CD/downloaded version?

If you are, you can go into "Forms" mode to access the 6252, which has a worksheet on it for the Unrecaptured Section 1250 gain.

[freewey]

Thank you. That is exactly what I need, but unfortunately I am using the online version and it doesn't seem to allow access to the forms. Most people wouldn't have known the error. Using the wrong tax rate does get me $1000 more refund, so maybe I should just submit it, buy the audit insurance and make Intuit pay for it!

[AmeliesUncle]

I know they try and push the online version, but the CD/downloaded version is better.

From what I've read, their Accuracy Guarantee is rather limited.  And quite often if the question isn't showing up for you, it may show up for someone else (or show up later in the season), so Intuit can blame you and say that you just didn't enter the information correctly.

[freewey]

Interesting that the platforms are so different. I assumed they were the same. I didn't want to pay up front because I wanted to confirm that the software could handle my complex situation first. Now I know. I wouldn't be comfortable filing knowing it is incorrect.

Thanks so much for the information.

[freewey]

No. Online version of Turbo tax does not have an entry for depreciation on prior year installment sale and does not allow access to the form. Therefore it is calculating tax at incorrect capital gain rate. The results are wrong. I cannot and will not knowingly submit an incorrect return even if it does give me a much larger refund. Please correct your program!