Are you talking about the basis from the sale of your property? That would be the 1st step in deriving your gross profit when you initially sell the property. If you look at pg.3 on that Publication 537, you would include the following Adjusted basis + Selling expenses + Depreciation recapture and deduct that from your sale of the property in the 1st year. What you are talking about is the gross profit percentage which you apply every year when you receive your yearly payments from the initial installment sale.For that, you take your annual payment less interest x your gross profit perecentage.
There is a worksheet on that same pg. 3 of the Publication to the left to help you figure your gross profit percentage inorder to figure out your installment sales income. The gross profit percentage would be entered on Line 19 of Form 6251. See HERE
[EDIT 1/25/2023 11:00 AM PST]
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