How do I report an installment sale for private stock? When I say "I sold stock" and that it's not Qualified Small Business Stock, it says I can't report it (wrong!).

[TomYoung · Accepted solution]

I've brought this up before and for some reason TurboTax doesn't want to change things in the area.  That said, there does seem to be a way to enter this:

Use the Sales of Business Property interview.

1. On the "Any Other Property Sales?" page tick "Sales of real estate, cars or anything else for which you receive payment over two or more tax years (installment sales)
2. On the "Installment Sales" page click "Yes"
3. On the "Property Description" page enter "Description of Property Sold", "Date you Acquired This Property", "Date Your Sold This Property"
4. On the "Sales Information" page enter "Selling Price", "Sales Expenses" and "Cost or Basis"
5. On the "How Was This Item Used?" page answer "No"
6. On the "Sold Stock" page answer "No"
7. On the "Collectible" page answer "No"
8. On the "Passive Activities" page answer "No"
9. On the "Debt Assumed by Buyer" page enter the appropriate amount
10. On the "Principal and Interest Received" page enter appropriate amounts
11. On the "Depreciable Property" page answer "No"
12. On the "Related Party Sale" page answer "No" (I assume)

This does appear to work, but I may be missing something. 

No Warranty, Express or Implied, blah, blah, proceed at your own risk, blah, blah.

Tom Young

[KC1212]

Was this approach successful? I found a TurboTax Limitations 2023 document that explicitly states TT does not support installment sales on a stock that is not Section 1202 Qualified Small Business Stock. Your approach seems to work at the data entry level. I can't review the forms until I pay which I don't want to do if I can't ultimately use the product. 

[amit012345]

The approach mentioned in the response doesn't work in turbotax 2023. Is Turbotax going to support installment sales for non QSB Stock?

[KC1212]

I did use that procedure in 2023 and it did work for me. Ultimately Form 6252 was created and appeared correct. My return was accepted and processed successfully. 

[amit012345]

Thanks kc1212. Can you please describe the steps since for me as soon as i memtion it as non qsb stock, it tells me that it does not qualify for installment sale.

[KC1212]

You have to follow that procedure exactly, including saying no to Stock sale. This is a work-around, you are fooling TT to create the Form 6252. Try it and examine the F6252 it creates, mine looked correct (even for a stock sale, at least to me). Remember only the forms are sent to the IRS, not the questionnaire that created them. If you're not happy with your form then definitely don't use this work-around.

[amit012345]

HI kc1212, 

I was doing 1 wrong step at #6. When i corrected it and answered "no", it went through. Thanks again.