When you report a repossession, you must determine the gain or loss on the property. When you repossess your property after making an installment sale, you must figure the following amounts.
1.Your gain (or loss) on the repossession.
2.Your basis in the repossessed property.
Basis in installment obligation. Your basis is figured on the obligation's full face value or its FMV at the time of the original sale, whichever you used to figure your gain or loss in the year of sale. From this amount, subtract all payments of principal you have received on the obligation. The result is your basis in the installment obligation. If only part of the obligation is discharged by the repossession, figure your basis in only that part. You report gain or loss from a repossession on the same form you used to report the original sale. If you reported the sale on Form 4797, use it to report the gain or loss on the repossession.
If you used form 4797 to report in your original sale, you will need to report the gain or loss on form 4797. To report this, go to:
- Tax tools
- tools
- topic search
- type in 4797
As you go through the questions, Turbo Tax does not make an assumption that this is a repossession. The only purpose in reporting this is to determine if you have a gain or loss on the repossession.
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