Seller Financed Income from Rental Sale for a Trust

[Gsowen]

Trust owns a seller financed receivable on which payments were received in 2024 related to sales of rental property in 2021.  Trying to figure out how to enter this in Turbo Tax Business and Trust version on the trust tax return.  First year filing the trust tax return.  I entered the sale in the rental property asset and disposal fields of the tax return but since the sale date was 2021 the software was giving me an message stating sale date must be  in same filing tax year (2024).  Also it doesn't ask me if the sale was seller financed loan.  How do I enter the income received in 2024 related to seller financed income in the Turbo tax  trust software?  Thanks.  

[DianeW777]

Yes, you must enter a 2024 date since the sale occurred in 2021. You can simply add an investment sale for the percentage of the payment that is capital gain in 2024 with no cost basis and a 'Various' purchase date. Of course you will need to enter 2024 as the sales date, however you can name the investment sale '2021 Installment Sale Payment' to identify it. 

Add the interest income as if you did receive a 1099-INT. This will take care of the sale for the trust return for 2024. The name of the payer will be the buyer.

Note: Since all depreciation recapture had to occur in the year of sale, the only taxable gain now is capital gain that would end up on Schedule D anyway.