report Seller-financed mortgage on 1065 return

Forum|Forum|3 months ago
April 7, 2026
1 reply
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Used an accountant to prepare 1065 in 2023. He filed a 6252 for an installment sale. There is a seller-financed mortgage. I am doing the return myself this year, but line 7 (Other Income) produces a self-employment tax, and Schedule K line 5 is only for bank interest and such. So where does it go ?

TurboTax Business Windows

ThomasM125

Level 15

You need to report the installment sale income on Form 6252 "Installment sale Income". As such, the gain will populate on Form 1065, page 5 as capital gain or section 1231 gain on sale of business or personal assets. As such, the gain will not be subject to self-employment tax. I believe you are reporting the sale as "Other Income" in error.

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user17755779361Author

Level 2

The original 6252 was filed by accountant in 2023. It is not part of my history in TT software. I tried to fill out another one stating the original sale date, but it does not ask about interest arrangements and seems to do nothing for the return. So, stuck. Thinking I may have to report it on personal return.