When you sell property over several years, the IRS considers it to be an installment sale. You do need to include the sale in the year of the sale as well as every year that you get payments. The form you do this on is the form 6252.
If you are using TurboTax Deluxe on a CD then that form is already on there. If you file online, you need Premier or higher.
- Open (continue) your return in TurboTax, if it's not already open.
- In the search box, search for 6252 and then click the "Jump to" link in the search results.
- Follow the prompts. TurboTax will create your Form 6252..
Form 6252 helps you figure out how much of the money you received during a given tax year was a return of capital, how much was a gain and how much was interest.
When you fill out Form 6252, TurboTax will automatically carry this year's portion of the gain to Form 4797. It will also carry the interest portion that you entered to Schedule B and a Seller-Financed Interest Statement for Filing.
If the bank account that held any Installment payments paid any interest on the money held in that account during the year, that will be a separate 1099-Interest entry.
