Installment sale early payoff

[MelsDeli]

I sold a rental condo on an installment sale. The term was 10 years with a balloon at payment at payment 120. She sold the property outright this month. How do I report the proceeds? What should I expect the tax liability to be? I bought it in ' 19 for $125K and sold it on installment in '23 for $281K the unpaid balance in $252K. Thank you for your input.   

[tagteam]

You can report the transaction in the Sale of Business Property section of the program.

Critically, though, the issue of whether you have been taking depreciation deductions on the rental since you first purchased the property (and presumably rented it since that date).

How did you handle this transaction on your 2023 return? Note that you have to report any portion of the gain from the sale of your rental condo that's ordinary income under the recapture rules in the year of the sale (2023).